Joe Schnaier Deposition

FILED: NEW YORK COUNTY CLERK 07/16/2021 11:43 AM INDEX NO.
651538/2018
NYSCEF DOC. NO. 398 Joseph Schnaier Confidential RECEIVED NYSCEF: 07/16/2021
09/24/2020 1
·1· · · · · · · · ·CONFIDENTIAL
·2· ·SUPREME COURT OF THE STATE OF NEW YORK

· · ·COUNTY OF NEW YORK
·3· ·-----------------------------------------x
· · ·DANCO ENTERPRISES, LLC, WANTICKETS RDM, LLC,
·4· ·WANTMCS HOLDINGS, LLC, and JOSEPH SCHNAIER,
·5· · · · · · · · · · · · · · · · Plaintiffs, :
·6· · · · · · · · ·- against -
·7· ·LIVEXLIVE MEDIA, INC., f/k/a LOTON CORP.,

· · ·LIVEXLIVE TICKETS, INC., ROBERT S. ELLIN,
·8· ·ALEX ELLIN, BLAKE INDUSTRY, and
· · ·COMPUTERSHARE TRUST COMPANY, N.A.,
·9
· · · · · · · · · · · · · · · · · Defendants. :
10· ·-----------------------------------------x
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· · · · · · · · · · · · · · · ·September 24, 2020
12· · · · · · · · · · · · · · ·9:35 a.m.
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15· · · · · ·EXAMINATION BEFORE TRIAL of JOSEPH
16· ·SCHNAIER, one of the Plaintiffs herein, taken
17· ·by the Defendants, pursuant to Court Order,
18· ·held via videoconference by all parties,
19· ·before Michelle Lemberger, a Notary Public of
20· ·the State of New York.
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·2· ·A P P E A R A N C E S:
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·4· ·SCHLAM STONE & DOLAN, LLP

· · ·Attorneys for Plaintiffs
·5· · · · 26 Broadway
· · · · · New York, New York 10004
·6· ·BY:· JOSHUA WURTZEL, ESQ.
·7· · · · JESSICA R. CATERINA, ESQ.
·8
·9· ·LAW OFFICES OF STEVEN D. ISSER, ESQ.

· · ·Attorneys for Defendants
10· · · · 1359 Broadway, Suite 2001
· · · · · New York, New York 10018
11· ·BY:· STEVEN D. ISSER, ESQ.
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· · · · · · · · · *· · ·*· · ·*· · ·*· · ·*
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·2· · · · · · · ·S T I P U L A T I O N S
·3· · · IT IS STIPULATED AND AGREED by and between
·4· ·the attorneys for the respective parties
·5· ·herein, and in compliance with Rule 221 of the
·6· ·Uniform Rules for the Trial Courts:
·7· · · THAT the parties recognize the of Rule 3115
·8· ·subdivisions (b), (c) and/or (d).· All
·9· ·objections made at a deposition shall be noted
10· ·by the officer before whom the deposition is
11· ·taken, and the answer shall be given and the
12· ·deposition shall proceed subject to the
13· ·objections and to the right of a person to
14· ·apply for appropriate relief pursuant to
15· ·Article 31 of the CPLR;
16· · · THAT every objection raised during a
17· ·deposition shall be stated succinctly and
18· ·framed so as not to suggest an answer to the
19· ·deponent and, at the request of the
20· ·questioning attorney, shall include a clear
21· ·statement as to any defect in form or other
22· ·basis of error or irregularity.· Except to the
23· ·extent permitted by CPLR Rule 3115 or by this
24· ·rule, during the course of the examination
25· ·persons in attendance shall not make
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·1
·2· ·statements or comments that interfere with the
·3· ·questioning.
·4· · · THAT a deponent shall answer all questions
·5· ·at a deposition, except (i) to preserve a
·6· ·privilege or right of confidentiality, (ii) to
·7· ·enforce a limitation set forth in an order of
·8· ·a court, or (iii) when the question is plainly
·9· ·improper and would, if answered, cause
10· ·significant prejudice to any person.· An
11· ·attorney shall not direct a deponent not to
12· ·answer except as provided in CPLR Rule 3115 or
13· ·this subdivision.· Any refusal to answer or
14· ·direction not to answer shall be accompanied
15· ·by a succinct and clear statement on the basis
16· ·therefore.· If the deponent does not answer a
17· ·question, the examining party shall have the
18· ·right to complete the remainder of the
19· ·deposition.
20· · · THAT an attorney shall not interrupt the
21· ·deposition for the purpose of communicating
22· ·with the deponent unless all parties consent
23· ·or the communication is made for the purpose
24· ·of determining whether the question should not
25· ·be answered on the grounds set forth in
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·1
·2· ·Section 221.2 of these rules, and, in such
·3· ·event, the reason for the communication shall
·4· ·be stated for the record succinctly and
·5· ·clearly.
·6· · · THAT the failure to object to any question
·7· ·or to move to strike any testimony at this
·8· ·examination shall not be a bar or waiver to
·9· ·make such objection or motion at the time of
10· ·the trial of this action, and is hereby
11· ·reserved; and
12· · · THAT this examination may be signed and
13· ·sworn to by the witness examined herein before
14· ·any Notary Public, but the failure to do so or
15· ·to return the original of the examination to
16· ·the attorney on whose behalf the examination
17· ·is taken, shall not be deemed a waiver of the
18· ·rights provided by Rules 3116 and 3117 of the
19· ·CPLR, and shall be controlled thereby; and
20· · · THAT the certification and filing of the
21· ·original of this examination are hereby
22· ·waived; and
23· · · THAT the questioning attorney shall provide
24· ·counsel for the witness examined herein with a
25· ·copy of this examination at no charge.
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·2· · · · · · · ·THE REPORTER:· The attorneys
·3· · · · ·participating in this deposition
·4· · · · ·acknowledge that I am not physically
·5· · · · ·present in the deposition room and
·6· · · · ·that I will be reporting this
·7· · · · ·deposition remotely.· They further
·8· · · · ·acknowledge that, in lieu of an oath
·9· · · · ·administered in person, I will
10· · · · ·administer the oath remotely,
11· · · · ·pursuant to Executive Order Number
12· · · · ·202.7 issued by Governor Cuomo on
13· · · · ·March 19, 2020.· The parties and
14· · · · ·their counsel consent to the
15· · · · ·arrangement and waive any objections
16· · · · ·to this manner of reporting.
17· · · · · · · ·Please indicate your agreement
18· · · · ·by stating your name and your
19· · · · ·agreement on the record.
20· · · · · · · ·MR. ISSER:· Stephen Isser,
21· · · · ·agree.
22· · · · · · · ·MR. WURTZEL:· Joshua Wurtzel
23· · · · ·from Schlam Stone & Dolan for the
24· · · · ·plaintiff, including the witness, and
25· · · · ·we agree as well.
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·2· · · · · · · ·THE REPORTER:· Will the witness
·3· · · · ·kindly present a government-issued
·4· · · · ·identification by holding it up to
·5· · · · ·the camera for verification.
·6· · · · · · · ·(Witness complies.)
·7· · · · · · · ·THE REPORTER:· Please state
·8· · · · ·your name for the record.
·9· · · · · · · ·THE WITNESS:· Joseph Schnaier.
10· · · · · · · ·THE REPORTER:· What is your
11· · · · ·current address?
12· · · · · · · ·THE WITNESS:· 2170 Holland Way,
13· · · · ·Merrick, New York 11566.
14· ·J O S E P H· ·S C H N A I E R, having been
15· · · · · ·first duly sworn before a Notary
16· · · · · ·Public of the State of New York
17· · · · · ·was examined and testified as
18· · · · · ·follows:
19· · · · · · · ·MR. ISSER:· Before we begin, I
20· · · · ·just want to state on the record that
21· · · · ·defendants are designating this
22· · · · ·deposition, the transcript, and the
23· · · · ·exhibits as confidential pursuant to
24· · · · ·the confidentiality order or
25· · · · ·protective order in this case, I
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·forget the title.· So the deposition,
·3· · · · ·the transcript, and the exhibits are
·4· · · · ·deemed confidential.
·5· ·EXAMINATION BY
·6· ·MR. ISSER:
·7· · · · Q.· Good morning, Mr. Schnaier --
·8· · · · · · · ·MR. WURTZEL:· Steve, we're
·9· · · · ·going to cross designate as well for
10· · · · ·the moment subject to a further
11· · · · ·review of the transcript during which
12· · · · ·we might agree to dedesignate
13· · · · ·portions of it.
14· · · · · · · ·MR. ISSER:· So it is mutually
15· · · · ·agreed that the deposition, the
16· · · · ·exhibits, and the transcript are
17· · · · ·confidential, both parties reserving
18· · · · ·their rights to dedesignate portions.
19· · · · · · · ·MR. WURTZEL:· Correct.
20· · · · · · · ·MR. ISSER:· Absent any
21· · · · ·dedesignation, it will be treated as
22· · · · ·confidential.
23· ·EXAMINATION BY
24· ·MR. ISSER:
25· · · · Q.· As I started saying, Mr. Schnaier,
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·1· · · · · · · · · ·Joseph Schnaier
·2· · good morning.· My name is Steven Isser, I
·3· · represent the defendants in this case,
·4· · LiveXLive Tickets, Inc., LiveXLive Media,
·5· · Inc. and Rob Ellin.
·6· · · · · · As the court reporter said, although
·7· · this is being -- this deposition is being
·8· · conducted by Zoom we're going to treat it as
·9· · a New York deposition in all respects as is
10· · agreed by counsel and yourself off the
11· · record?
12· · · · · · Before we start, I just want to give
13· · you, for lack of a better word, ground rules
14· · for the deposition.
15· · · · · · First, try and give verbal answers
16· · to my questions.· The court reporter will be
17· · typing down the questions and the answers and
18· · she cannot type down nods or a shake of the
19· · head.· So try and remember to give verbal
20· · answers.· In addition, please try to let me
21· · finish my question before you start to
22· · answer.
23· · · · · · It's human nature when you
24· · understand the question to begin to answer,
25· · but again, the court reporter can't type us
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·1· · · · · · · · · ·Joseph Schnaier
·2· · both talking at the same time so just try to
·3· · let me finish my question before you give
·4· · your answer.
·5· · · · · · If you don't understand a question,
·6· · just please ask me to rephrase it or let me
·7· · know.· I will try to make the question
·8· · understandable.· And finally if you need a
·9· · break, this isn't a marathon, just ask for a
10· · break.· We will reasonably accommodate
11· · breaks, but if I have a question pending, I
12· · may request you answer the question before we
13· · have a break, but otherwise let us know if
14· · you need a break.
15· · · · · · How old are you, Mr. Schnaier?
16· · · · A.· 45.
17· · · · Q.· And when were you born?
18· · · · A.· July 17, 1975.
19· · · · Q.· And where were you born?
20· · · · A.· Brooklyn, New York.
21· · · · Q.· And where were you raised?
22· · · · A.· Brooklyn, New York.
23· · · · Q.· And what is the highest level of
24· · education you received?
25· · · · A.· Three years of university, college.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Did you get a degree?
·3· · · · A.· I didn't finish.· I didn't finish.
·4· · I had one semester left, I think.
·5· · · · Q.· Where did you go to high school?
·6· · · · A.· Sephardic High School.
·7· · · · Q.· In Brooklyn?
·8· · · · A.· Yes.
·9· · · · Q.· And when did you graduate?
10· · · · A.· I don't remember the exact year. I
11· · think it was '93.
12· · · · Q.· And where did you attend college?
13· · · · A.· I did a year in Israel.· It was a
14· · program to get college credits and then I
15· · went to Brooklyn College.
16· · · · Q.· At the time you stopped going, did
17· · you have a major?
18· · · · A.· Business management, I believe.
19· · · · Q.· And I take it you did not receive a
20· · degree?
21· · · · A.· Correct.· I didn't finish.
22· · · · Q.· And why did you not finish college?
23· · · · A.· I had a good opportunity to go to
24· · work, and I took it.
25· · · · Q.· What was that opportunity?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· To go work at a brokerage firm.
·3· · · · Q.· And what brokerage firm was that?
·4· · · · A.· I believe it was Sterling Foster.
·5· · · · Q.· And what did you do for Sterling --
·6· · what year was this?
·7· · · · A.· I don't remember exactly.
·8· · · · Q.· Well, if you graduated high school
·9· · in '93, did you go straight to college out of
10· · high school?
11· · · · A.· Yes.
12· · · · Q.· And about three years of college?
13· · · · A.· Roughly, approximately.
14· · · · Q.· So, approximately 1996 would this
15· · be?
16· · · · A.· Possible.
17· · · · Q.· All right.· And what was your
18· · position at Sterling Foster?
19· · · · A.· I was there training.
20· · · · Q.· Training for what?
21· · · · A.· To be a broker.
22· · · · Q.· And did you become a broker?
23· · · · A.· Yes.
24· · · · Q.· All right.· When did you become a
25· · broker?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I don't remember the exact date.
·3· · · · Q.· Were you still at Sterling Foster
·4· · when you became a broker?
·5· · · · A.· I believe I got licensed while I was
·6· · there.· Yes, it was part of the training
·7· · program.
·8· · · · Q.· When did you become licensed as a
·9· · broker?
10· · · · A.· I don't recall the exact date.
11· · · · Q.· All right.· Well, how long were you
12· · at Sterling Foster?
13· · · · A.· I don't remember.· Maybe a year or
14· · two.· Two years.
15· · · · Q.· How long was the training program?
16· · · · A.· I believe it was a year.
17· · · · Q.· All right.· And what did you do as a
18· · broker for Sterling Foster?
19· · · · A.· Not too much.· I just got through
20· · the training program.· I got licensed, and I
21· · don't believe I was there much longer after
22· · that.
23· · · · Q.· Well, could you describe what a
24· · broker is for the record?· What kind of
25· · broker you were and what you did as a broker?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·MR. WURTZEL:· Objection to
·3· · · · ·form.
·4· · · · A.· We would be -- we were trained to
·5· · manage money for clients.
·6· · · · Q.· What does that mean?· How did you
·7· · manage their money?
·9· · · · ·form.
10· · · · A.· We recommended and did some research
11· · on certain companies to invest in.
12· · · · Q.· And what kind of research would you
13· · do?
14· · · · A.· I don't recall.· This was years ago.
15· · · · Q.· Well, would you read their
16· · securities and exchange filings?
17· · · · A.· Possibly.
18· · · · Q.· Did you?
19· · · · A.· I don't --
20· · · · Q.· As part of your duties as a broker
21· · at Sterling Foster did you review exchange
22· · filings by companies you were considering
23· · recommending your clients invest in?
24· · · · A.· Possible.
25· · · · Q.· You don't remember if you did?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Not specifically.
·3· · · · Q.· Do you know what a securities and
·4· · exchange filing is?· Do you know what I mean
·5· · by that term?
·6· · · · A.· Yes.
·7· · · · Q.· And are you aware of whether
·8· · publically-trading companies have an
·9· · obligation to file certain information with
10· · the Securities and Exchange Commission?
11· · · · A.· Yes.
12· · · · · · · ·MR. WURTZEL:· Hold on,
13· · · · ·objection.· Calls for the witness to
14· · · · ·provide a legal conclusion about SEC
15· · · · ·regulations.
16· · · · · · · ·MR. ISSER:· Josh, you could
17· · · · ·just say calls for a legal
18· · · · ·conclusion.· As you admonish often,
19· · · · ·if I want a speaking objection, I'll
20· · · · ·ask for it.· And I don't know that
21· · · · ·that's a legal conclusion.
22· · · · Q.· So as a broker, have you ever read
23· · filings made by companies with the Security
24· · and Exchange Commission in order to determine
25· · whether you would recommend someone purchase
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·1· · · · · · · · · ·Joseph Schnaier
·2· · their stock?
·3· · · · A.· I mean, specifically, I don't know,
·4· · but it's possible I did.
·5· · · · Q.· So was it your job as a broker to
·6· · manage client's investments?· You said --
·7· · withdrawn.
·8· · · · · · As a broker managing client's
·9· · investments, would you recommend certain
10· · investments into publically-traded companies
11· · by these clients?
12· · · · · · · ·MR. WURTZEL:· Objection to
13· · · · ·form.
14· · · · A.· I'm not very clear on that question.
15· · · · Q.· All right.· How long were you a
16· · broker for?
17· · · · A.· Years.
18· · · · Q.· More than ten years?
19· · · · A.· Probably.
20· · · · Q.· More than 20 years?
21· · · · A.· No.
22· · · · Q.· All right.· And in the -- more than
23· · 15 years?
24· · · · A.· I'm not sure.· I don't remember the
25· · exact date that we stopped.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Well, in the at least ten years
·3· · you've been a broker, you acted as a broker,
·4· · did you ever review filings made by companies
·5· · with the Securities and Exchange Commission
·6· · in order to evaluate whether it would be a
·7· · good investment for you or your clients?
·9· · · · ·form.
10· · · · Q.· You can answer.
11· · · · A.· It's possible I did.· I don't know
12· · if I used that as a measure to invest in
13· · companies.
14· · · · Q.· So you don't -- you don't have a
15· · specific recollection of ever having reviewed
16· · security and exchange filings in order to
17· · recommend --
18· · · · A.· I'm sure I have.· I'm sure I have.
19· · · · Q.· So then the answer is yes, you have
20· · reviewed security and exchange filings made
21· · by companies to evaluate whether it would be
22· · a stock you'd recommend to your client or
23· · invest in yourself?
25· · · · ·form.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Can you answer that question?
·3· · · · A.· I said it's possible that I reviewed
·4· · filings.· I didn't -- everything else I don't
·5· · know, you're putting that -- you're saying
·6· · that.
·7· · · · Q.· Well, why would you review filings?
·8· · · · A.· I said it's possible I reviewed
·9· · filings.· I mean --
10· · · · Q.· I know.· I'm asking -- I understand
11· · you're using the word possible.· I'm asking
12· · you, do you have any specific recollection of
13· · ever reviewing any SEC filing made by any
14· · public company?· Let's start there.
15· · · · A.· I'm sure I have.
16· · · · Q.· So it's not just possible, you have;
17· · is that correct?
18· · · · A.· Yes.
19· · · · Q.· And is it not just possible, have
20· · you ever reviewed an SEC filing in order to
21· · evaluate whether an investment in that
22· · company would be good or not?
24· · · · ·form.
25· · · · Q.· Go ahead.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· In order to evaluate, I can't answer
·3· · you specifically on that.
·4· · · · Q.· Okay.
·5· · · · A.· But it's possible it was one of many
·6· · other, you know, things that we did through
·7· · research.
·8· · · · Q.· Well, tell me the things you did for
·9· · research.· Were you a broker for ten years --
10· · withdrawn.
11· · · · · · When did you stop being a broker,
12· · about 2006, 2007?
13· · · · A.· I believe it was '07, if my memory
14· · serves me correctly.
15· · · · Q.· What did you do after that?
16· · · · A.· We went into doing my own deals
17· · privately.
18· · · · Q.· Investment deals?
19· · · · A.· Yes, private equity stuff, myself.
20· · · · Q.· And how long did you do that?
21· · · · A.· Up until now, I mean, I'm still
22· · doing it.
23· · · · Q.· So you've been in the investments
24· · industry for 25 plus years; is that accurate?
25· · · · A.· It depends on when you say that I
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·1· · · · · · · · · ·Joseph Schnaier
·2· · started.
·3· · · · Q.· As a broker, as a trainee.· As a
·4· · trainee to be a broker.
·5· · · · A.· I would say between 10 and 16 years,
·6· · something like that.
·7· · · · Q.· Well, we were just saying you
·8· · started at Sterling Foster probably in 1996,
·9· · so from 1996 to now would be 24 years.· So
10· · let's say 20 plus years you've been in the
11· · investment industry?
12· · · · A.· Okay, I guess, if you say so.
14· · · · ·form.
15· · · · Q.· Well, it's your life, Mr. Schnaier.
16· · This is your biography.
17· · · · A.· I mean, I don't have the exact
18· · dates.· If those are the dates then they are
19· · what they are.· I'm sorry, I'm not trying to
20· · upset you.
21· · · · Q.· All right.· You know what, Mr.
22· · Schnaier, let's pick up with Exhibit 68.
23· · Open Exhibit 68, please.
24· · · · A.· Okay.
25· · · · · · · ·MR. WURTZEL:· You're talking
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·about tab 68?
·3· · · · · · · ·MR. ISSER:· Yes, when I say
·4· · · · ·exhibit, it's tab.· Yes.
·5· · · · · · · ·(Whereupon, at this time, the
·6· · · · ·reporter marked the above-mentioned
·7· · · · ·financial industry regulatory
·8· · · · ·authority letter of acceptance,
·9· · · · ·waiver and consent as Defendants'
10· · · · ·Exhibit 1 for identification.)
11· ·BY MR. ISSER:
12· · · · Q.· Do you recognize this document?
13· · First, for the record, this is a financial
14· · industry regulatory authority letter of
15· · acceptance, waiver and consent.
16· · · · · · Do you recognize this document, Mr.
17· · Schnaier?
18· · · · A.· Yes.
19· · · · Q.· Okay.· On the second to last page of
20· · that document, is that your signature?
21· · · · A.· Yes, it is.
22· · · · Q.· All right.· Now, if we look at
23· · background, it has Joseph Schnaier first
24· · became registered with FINRA as a general
25· · securities representative in November 1995
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·1· · · · · · · · · ·Joseph Schnaier
·2· · through a former member firm; is that
·3· · accurate?
·4· · · · A.· Where do you see that?
·5· · · · Q.· Under background on the first page.
·6· · A, under A is background.
·7· · · · A.· Acceptance and consent, oh, here it
·8· · is.· Okay.· If it says it, I believe it's
·9· · accurate.
10· · · · Q.· Do you think it might not be
11· · accurate?
12· · · · A.· No, I believe it is accurate if it
13· · says it.· I don't know why you would say
14· · that.
15· · · · Q.· Thank you.· So I don't know why you
16· · wouldn't just say yes, it's accurate.
17· · · · · · Can you explain why you didn't just
18· · say yes, it's accurate?
20· · · · ·form.
21· · · · Q.· You can answer the question.
22· · · · A.· I don't know what the question was.
23· · · · Q.· Why didn't you just say yes, it's
24· · accurate, if you believe it's accurate?
25· · · · A.· I thought I did.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· All right.· Now, does this refresh
·3· · your recollection then that you've been in
·4· · the securities industry since November of
·5· · 1995?
·6· · · · A.· Yes.
·7· · · · Q.· Okay.· So you've been in the
·8· · securities industry, the investment industry,
·9· · whether it's as a broker or in private equity
10· · since November of 1995, which is
11· · approximately almost 25 years.· Correct?
13· · · · ·form.
15· · · · A.· Yes.
16· · · · Q.· Okay.· And in that 25 years, have
17· · you read SEC filings by public companies in
18· · order to help you form an opinion
19· · concerning -- in order to make an investment
20· · for yourself or one of your clients when you
21· · were a broker?
23· · · · ·form.
24· · · · A.· It's possible.
25· · · · Q.· Well, I'm not asking if you don't
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·1· · · · · · · · · ·Joseph Schnaier
·2· · know, if you have or haven't; is that your
·3· · testimony?
·4· · · · A.· I'm saying I don't know if I read a
·5· · filing in order to make an investment in a
·6· · company.· I don't necessarily.
·7· · · · Q.· All right.· Well, when you, either
·8· · as a broker or in any other capacity, when it
·9· · concerns an investment, whether by yourself
10· · or for a client, what steps would you take to
11· · determine whether you felt it was a good
12· · investment?
14· · · · ·form.
15· · · · A.· I mean, there's many things.· I'd
16· · look at the management team, see how honest
17· · they are, see their reputation.· I would look
18· · at their financials.· I would look at their
19· · business model, I would like at their -- I
20· · mean, there's many things I would look at.
21· · And it's possible, like you said, it's
22· · possible that their filings may be one of
23· · many things that I would look at.
24· · · · Q.· You keep saying it's possible.· Do
25· · you know, yes or no, did you in the past
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·1· · · · · · · · · ·Joseph Schnaier
·2· · review SEC filings as part of your
·3· · determination concerning whether to make an
·4· · investment for yourself or a client?
·5· · · · A.· You need to be --
·6· · · · · · · ·MR. WURTZEL:· Objection.· Asked
·7· · · · ·and answered.
·8· · · · Q.· You can answer.
·9· · · · A.· It's possible I have, but I don't
10· · know.· I don't know specifically.
11· · · · Q.· But is it possible that in your 20
12· · plus years as -- in the investment industry,
13· · you've never read a Securities and Exchange
14· · filing?
15· · · · A.· No.· I'm sure I read a Securities
16· · and Exchange filing.
17· · · · Q.· And you said you review company's
18· · financials.· Where did you obtain these
19· · financials?
20· · · · A.· Could be through -- most likely
21· · through the company or through public
22· · information.
23· · · · Q.· And what public information would
24· · that be?
25· · · · A.· Sometimes it could be -- it could be
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·1· · · · · · · · · ·Joseph Schnaier
·2· · their filings, it could be, you know, stuff
·3· · that they put out on releases.· It could be
·4· · stuff that they have on their own proprietary
·5· · site.· It could be stuff that they sent me,
·6· · you know.
·7· · · · Q.· Press releases?· You said releases,
·8· · is that press releases?
·9· · · · A.· Not necessarily press releases,
10· · certain releases that they did.· Company
11· · releases.
12· · · · Q.· What kind of releases are there
13· · other than press releases?
14· · · · A.· Oh, I don't know.· There's probably
15· · many different kinds of releases.
16· · · · Q.· Sir, you just -- you said you would
17· · review releases.· I said press releases, you
18· · said not necessarily.· So which releases did
19· · you review for companies that were not press
20· · releases?
21· · · · A.· Well, companies have proprietary
22· · releases that they put out there, too.
23· · · · Q.· What are those?· Can you explain?
24· · I've never heard of that.
25· · · · A.· I've seen, you know, certain
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·1· · · · · · · · · ·Joseph Schnaier
·2· · companies put releases out.· So you would
·3· · assume that public information, you know, is
·4· · correct.· I would use that as well.
·5· · · · Q.· No, my question is, what is a
·6· · proprietary release?
·7· · · · A.· Stuff that companies give.
·8· · · · Q.· What does that mean?· What stuff?
·9· · Give to who?
11· · · · ·form.
12· · · · A.· Information that I receive from
13· · companies, in the case I'm looking at.
14· · · · Q.· I don't understand.· They send it
15· · just to you?· You said a proprietary release.
16· · I want to understand.
18· · · · ·form.
19· · · · A.· I said possibly.
20· · · · Q.· No, I'm asking -- I'm going to
21· · interrupt you because I want an answer.
22· · · · · · You used the term proprietary
23· · release.· I just want to know what that is.
24· · · · A.· It means information that's sent
25· · from the company directly.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· To you directly?
·3· · · · A.· Yes.
·4· · · · Q.· And only you?
·5· · · · A.· Yes.· Well, I don't know.· They
·6· · could send it to other people.· I don't know
·7· · if it's only me.
·8· · · · Q.· How do you get this proprietary
·9· · release?
10· · · · A.· You request it from the company.
11· · · · Q.· Is it a specific request or are you
12· · on a list to get that proprietary release?
13· · · · A.· I couldn't answer that.
14· · · · Q.· You get them, you just said you
15· · reviewed it.· How do you get --
16· · · · A.· It's possible I ask for it, I do
17· · request it.
18· · · · Q.· For these proprietary releases --
19· · I'm not familiar with the term, so these
20· · proprietary releases, is it you either make a
21· · phone call or send an e-mail to a company
22· · asking for certain information and they
23· · respond to you or is there a subscription
24· · service or something like that that you could
25· · sign up and you would get it from the
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·1· · · · · · · · · ·Joseph Schnaier
·2· · company?· I'm asking, how did you obtain
·3· · these proprietary releases?· And if it's more
·4· · than one way in the past, tell me.
·5· · · · · · Did you request specific information
·6· · from a company and they sent it to you?· Did
·7· · you sign up for some kind of subscription or
·8· · get on some list where they would send you
·9· · releases as part of the process of sending
10· · releases to others?· Or were there other ways
11· · you could get these proprietary releases, or
12· · did in the past get them?
13· · · · · · · ·MR. WURTZEL:· Objection.
14· · · · ·Objection to form.
15· · · · A.· You can request them.· There's stuff
16· · that they put out there that you can read.
17· · Different publications.· I don't know. I
18· · don't know what you're asking me.
19· · · · Q.· I'm going to interrupt you because I
20· · want an answer.
21· · · · · · You said you reviewed proprietary
22· · releases.· We're not now talking in
23· · speculation or what's possible.· This is what
24· · you told me.
25· · · · · · I said you reviewed press releases,
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·1· · · · · · · · · ·Joseph Schnaier
·2· · you said not necessarily press releases,
·3· · proprietary releases.· I'm trying to figure
·4· · out what it is.
·5· · · · · · When you got proprietary releases to
·6· · review, how did you get them?· Not it's
·7· · possible.· How did you get this proprietary
·8· · release?· Was it a specific response or
·9· · request of a company you made for
10· · information?· Do you ask beyond some kind of
11· · subscription or pay for or get for free a
12· · blast that comes out to other people that
13· · you're calling a proprietary release?· Is it
14· · other ways you got it?· Is it more than one
15· · way?
16· · · · · · I want to know all the ways you got
17· · what you called a proprietary release in the
18· · past.
20· · · · ·form.
21· · · · A.· Can I answer?
22· · · · Q.· Yes.
23· · · · · · · ·MR. WURTZEL:· Yes.· You can
24· · · · ·answer.
25· · · · A.· Requests -- I guess some of the ways
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·1· · · · · · · · · ·Joseph Schnaier
·2· · you request information from companies
·3· · directly.· Sometimes they give it, sometimes
·4· · they won't.· There are publications out there
·5· · that have different corporate releases in
·6· · them that I read.· That's pretty much it.
·7· · It's not really -- I wasn't trying to --
·8· · you're asking something I'm not sure what
·9· · you're really --
10· · · · Q.· What kind of publications have what
11· · kind of releases?
12· · · · A.· I don't know.· Different news. I
13· · read stuff all over the place.
14· · · · Q.· You said that publications that have
15· · different releases.· When you say, I read
16· · releases, I assumed that only meant press
17· · releases.· You seem to think there's other
18· · kinds of releases.· I'm trying to figure out
19· · what those are.
20· · · · · · What releases are in other
21· · publications?
22· · · · A.· I would read a lot of stuff.· So
23· · whatever you, you know, whatever is out
24· · there.· I read a lot.· I love reading.
25· · · · Q.· Well, as part of your evaluation of
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·1· · · · · · · · · ·Joseph Schnaier
·2· · potential investments, whether for yourself
·3· · or others, would you read press releases by
·4· · the company?
·5· · · · A.· Would I read a press release?
·6· · · · Q.· Yes?
·7· · · · A.· Why not?
·8· · · · Q.· Have you?· Is that part of your
·9· · evaluation?
10· · · · A.· Oh, I don't know if it's part of my
11· · evaluation, but I do read press releases,
12· · it's important.
13· · · · Q.· And it's part of your analysis of
14· · the management team to determine if they're
15· · honest.· How would you make that
16· · determination?
17· · · · A.· You look at their track record,
18· · their history.· Stuff like that.
19· · · · Q.· And what would you do to look at
20· · their track record or their history --
21· · withdrawn?
22· · · · A.· I look at the --
23· · · · Q.· In the past what have you done to
24· · look at their track record and history?
25· · · · A.· Just look at their bios.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Where would you get their bios?
·3· · · · A.· A lot of it is online, a lot of it,
·4· · you know, stuff like that.
·5· · · · Q.· What do you mean online?· How would
·6· · you find their bio online?
·7· · · · A.· I mean, you could look it up, you
·8· · know, on, you could do a search.· You could
·9· · look up everyone's bio.
10· · · · Q.· Is that what you did to find out the
11· · bios of management?· Did you search online
12· · when you --
13· · · · A.· What management are you talking
14· · about?
15· · · · Q.· Any and all.· You told me when I
16· · asked you what information you would look at
17· · to evaluate an investment, you said you'd
18· · look at the management team.
19· · · · A.· Yes, it's possible I did, yes.
20· · · · Q.· I know it's possible.· I'm talking
21· · about what you did.· What do you still do?
22· · You've been in the investment industry for 25
23· · years and you're telling me that as part of
24· · your analysis you would evaluate the
25· · management team and see if they're honest.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · I'm asking you what you would do to
·3· · evaluate that.· That's it.· What have you
·4· · done in the last 25 years?
·5· · · · A.· Are you asking me about specifics?
·6· · · · · · · ·MR. WURTZEL:· Hold on, Joe.
·7· · · · ·Objection to form.
·8· · · · Q.· No.· I'm asking you any and all
·9· · companies.· What have you done in the past 25
10· · years to evaluate a management team,
11· · particularly their honesty?
13· · · · ·form.
14· · · · A.· Any and all?
15· · · · Q.· Anything you can remember that
16· · you've done to evaluate a management team.
17· · · · A.· You're saying any and all companies,
18· · is that what you're saying?
19· · · · Q.· I'm saying anything you can remember
20· · that you've done to evaluate a management
21· · team, for any company, for any potential
22· · investor.
23· · · · A.· I gave you my answer, that's the
24· · best I can remember.· I mean, we're going
25· · back and forth here.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· You search online to determine
·3· · whether to recommend an investment to a
·4· · client?· I just want to make clear I
·5· · understand.
·6· · · · A.· I didn't say that.
·7· · · · Q.· Well, I'm asking.· What was your
·8· · answer then because that seemed to be your
·9· · answer.
11· · · · ·form.
12· · · · Q.· What would you do besides search
13· · online?
14· · · · A.· I told you, there's a whole -- you
15· · know, many different things I would do to
16· · research the company.
17· · · · Q.· Tell me the many different things.
18· · · · A.· I went through it with you already.
19· · · · Q.· No.· All right.· You said you'd
20· · review the financials, you'd review releases,
21· · you'd look into the management team.· What
22· · else?· Anything else?
23· · · · A.· I'm sure there's more, I can't --
25· · · · ·form.· Asked and answered.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· All right.· And why did you leave
·3· · Sterling Foster?
·4· · · · A.· I got an offer at another firm.
·5· · · · Q.· What firm?
·6· · · · A.· I believe, if my recollection is
·7· · correct, it was Investors' Associates.
·8· · · · Q.· And what did you do at Investors'
·9· · Associates?
10· · · · A.· I was a broker there.
11· · · · Q.· And how long were you at Investors'
12· · Associates?
13· · · · A.· I don't remember.
14· · · · Q.· Was it more than two years?
15· · · · A.· Maybe.· I don't recall.
16· · · · Q.· Was it a day?
17· · · · A.· Come on.· No.
18· · · · Q.· I'm asking you to give me a ballpark
19· · estimate of how long you were there.
20· · · · A.· This was a while ago.· I really
21· · don't remember.· I don't want to give you an
22· · answer just to give you an answer.· I really
23· · don't remember.
24· · · · Q.· You have no idea.· All right.
25· · · · · · And what did you -- you were a
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·1· · · · · · · · · ·Joseph Schnaier
·2· · broker at Investors' Associates.· What did
·3· · you do as a broker?
·5· · · · ·form.· Are you asking him at
·6· · · · ·Investors' Associates or generally?
·7· · · · Q.· Well, let me ask.· Did you perform
·8· · the same function as a broker at Investors'
·9· · Associates as you did at Sterling Foster?
10· · · · A.· Pretty much.
11· · · · Q.· All right.· What was that function?
12· · · · A.· The same thing I told you at
13· · Sterling.· We managed money for clients.
14· · · · Q.· So you would evaluate potential
15· · investments for clients and recommend whether
16· · they make those investments or not?
17· · · · A.· Pretty much.
18· · · · Q.· And what was -- where did you work
19· · after Investors' Associates?
20· · · · A.· I think it was -- I forget the name
21· · of the firm but it was on 39 Broadway. I
22· · forgot the name of the firm, sorry.
23· · · · Q.· Mr. Schnaier, let me ask you, is
24· · there any -- are you on any medication today?
25· · · · A.· No.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Is there any reason you won't be
·3· · able to, medical reason, that you wouldn't be
·4· · able to answer my questions honestly or
·5· · completely today?
·6· · · · A.· No.
·7· · · · Q.· How long were you at this firm, was
·8· · it 39th Street?
·9· · · · A.· No.· I believe it was on 39
10· · Broadway.· Gray something.· I forgot the name
11· · of the firm.
12· · · · Q.· All right.· We'll call it the 39
13· · Broadway firm.· What did you do there?
14· · · · A.· I was a broker there.· Stockbroker.
15· · · · Q.· And how long were you a broker
16· · there?
17· · · · A.· I think it was -- like a year or
18· · two.· It was right up until 9/11.· And then
19· · we were about two blocks away from 9/11 and
20· · after that they shut it down.· The owner had
21· · a panic attack and he didn't want to work
22· · there anymore.
23· · · · Q.· So that's 2001.· And did you do the
24· · same thing as a broker at the 39 Broadway
25· · firm as you did previously?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Yes.
·3· · · · Q.· And where did you work after that?
·4· · · · A.· I think it was Jensen & Meyers, but
·5· · I could have missed -- it may have been
·6· · Jensen Meyers, the firm on 39 Broadway, or
·7· · opposite, one of the two.
·8· · · · Q.· What did you do at Jensen Meyers?
·9· · · · A.· I was a stockbroker.
10· · · · Q.· Same functions as previously?
11· · · · A.· Yes.
12· · · · Q.· How long were you at Jensen Meyers?
13· · · · A.· A couple of years.
14· · · · Q.· Why did you leave Jensen & Meyers?
15· · · · A.· I believe I wanted to open up my own
16· · practice at that time.
17· · · · Q.· When was this?
18· · · · A.· Probably to the best of my
19· · recollection -- I honestly don't remember the
20· · dates.· I'm just going to be speculating.
21· · · · Q.· Were you fired from any of these
22· · jobs you left before?
23· · · · A.· No, not to the best of my
24· · recollection, no.
25· · · · Q.· All right.· And where did you go
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·1· · · · · · · · · ·Joseph Schnaier
·2· · after Jensen Meyers?
·3· · · · A.· I think it was Montauk Financial. I
·4· · could be wrong, by the way.· I don't have it
·5· · in front of me.· My CRV has it all.
·6· · · · Q.· Sorry?
·7· · · · A.· I'm sorry.· My CRV has everything on
·8· · it.· So, you know, I don't have it in front
·9· · of me, I didn't know I needed it.
10· · · · Q.· When did you go to -- I'm sorry, did
11· · you say First Montauk?
12· · · · A.· No, I said Montauk Financial.
13· · · · Q.· And what did you do at Montauk
14· · Financial?
15· · · · A.· I was a stockbroker.
16· · · · Q.· Same duties and responsibilities as
17· · we discussed previously?
18· · · · A.· Yes.
19· · · · Q.· Doing the same thing at Sterling
20· · Foster, Investors' Associates, 39 Broadway
21· · firm, Jensen & Meyers?
22· · · · A.· Yes.
23· · · · Q.· And how long were you at Montauk?
24· · · · A.· I don't recall exactly.
25· · · · Q.· Let me ask you this:· Looking back
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·1· · · · · · · · · ·Joseph Schnaier
·2· · at Exhibit 68 on the background, it says,
·3· · Between 1995 and 2006 Schnaier was employed
·4· · at 10 other member firms.
·5· · · · · · Is that accurate?
·6· · · · A.· I believe so.
·7· · · · Q.· All right.· And were you a broker at
·8· · all those firms during 1995 and 2006?
10· · · · Q.· And in 2006, did you work at
11· · Prestige Financial Center?
12· · · · A.· Yes.
13· · · · Q.· All right.· And were you a broker
14· · for Prestige?
15· · · · A.· Yes.
16· · · · Q.· And it says here, Prestige filed a
17· · uniform termination notice for securities
18· · industry registration, terminating Schnaier's
19· · registration as of that date.
20· · · · · · What does that mean?
21· · · · A.· I don't know.· I don't recall that.
22· · · · Q.· You don't recall that?
23· · · · A.· No.
24· · · · Q.· Did you get a termination notice?
25· · · · A.· I don't recall that.· No.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· You don't know what that means?
·4· · · · ·form.
·5· · · · Q.· Do you know what that means?· I know
·6· · you might not recall it, do you know what
·7· · that means?· You were a securities broker.
·8· · Did you have to take a test to become a
·9· · licensed securities broker?
10· · · · A.· Yes.
11· · · · Q.· And you passed that test, I take it?
12· · · · A.· Yes.
13· · · · Q.· And as a licensed securities broker,
14· · were you aware of FINRA -- do you know what
15· · FINRA is?
16· · · · A.· Yes.
17· · · · Q.· Would you be aware of their rules
18· · and regulations?
19· · · · A.· Yes.
20· · · · Q.· Okay.· So I'm asking you, do you
21· · know what a uniform termination notice for
22· · securities industry registration is that you
23· · filed?
24· · · · A.· Yes.
25· · · · Q.· And what is it?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· It's a termination of a
·3· · registration.
·4· · · · Q.· So does that mean if you get that
·5· · you're no longer licensed to be a broker?· Is
·6· · that correct?· Is that what you're saying?
·7· · Explain it to me.
·9· · · · ·form.
10· · · · A.· No.· You're no longer -- I believe
11· · if I'm correct, you're no longer licensed to
12· · be with that firm, not to be a broker.
13· · · · Q.· Got it.
14· · · · · · And did you work as a securities
15· · broker after 2006 -- I'm sorry, 2008?
16· · · · A.· I don't believe I did.
17· · · · Q.· What did you do since then?
18· · · · A.· I'm trying to do my own private
19· · equity deals.
20· · · · Q.· What deals did you do?· Did you do
21· · any private equity deals?
22· · · · · · · ·MR. WURTZEL:· Objection of
23· · · · ·form.
25· · · · · · · ·MR. WURTZEL:· You can answer.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Oh, yes.
·3· · · · Q.· What deals were those?
·4· · · · A.· I don't recall.
·5· · · · Q.· You don't recall any deals that you
·6· · did in the last 12 years?
·7· · · · A.· The latest one was the acquisition
·8· · of Wantickets.
·9· · · · Q.· And what was before that?
10· · · · A.· There was some technology companies
11· · I invested in.
12· · · · Q.· Which ones?
13· · · · A.· QV Technology.
14· · · · Q.· Any others?
15· · · · A.· Seed Software.· Maybe some other
16· · ones; I don't remember the rest.
17· · · · Q.· All right.· And in these technology
18· · companies, what steps did you take to
19· · evaluate whether you should invest or not?
20· · · · A.· Just did my -- whatever steps I
21· · thought was necessary to invest.
22· · · · Q.· And what were those steps that you
23· · actually did?
24· · · · A.· I looked at the business model, I
25· · looked at the management team.· I looked at
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·1· · · · · · · · · ·Joseph Schnaier
·2· · what some of these companies were pre revenue
·3· · so they were, you know, we had to do some
·4· · different kind of due diligence on the actual
·5· · industry, stuff like that.
·6· · · · Q.· Did you look at those companies'
·7· · financials?
·8· · · · A.· Yes.
·9· · · · Q.· All right.· And besides -- so you
10· · have the technology companies and Wantickets.
11· · What else?· Anything else?
12· · · · A.· That's all I could remember right
13· · now.
14· · · · Q.· So in the last 12 years you could
15· · only remember four investments.· I think you
16· · mentioned Wantickets and two or three
17· · technology companies?
18· · · · A.· As of right now.
19· · · · Q.· How many licenses have you held,
20· · ever?
21· · · · A.· My New York State driver's license,
22· · what other license -- I never had -- that's
23· · pretty much it on that end.· And then
24· · professionally?· You're asking
25· · professionally?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· I forgot to add that in.· So I'm
·3· · curious if you have a fishing and gaming
·4· · license, of course.· But let's make it
·5· · professionally, I think that's a good idea.
·6· · · · · · What professional licenses have you
·7· · had?
·8· · · · A.· Oh, okay.· My Series 7 and my Series
·9· · 63.
10· · · · Q.· So you still currently hold those
11· · licenses?
12· · · · A.· No.
13· · · · Q.· When did you get -- when were you
14· · licensed for each?
15· · · · A.· I think up until, I think, 2007.
16· · · · Q.· Well, when did you -- you said a
17· · Series 7.· When did you achieve that license?
18· · · · A.· In '95 or '96, to the best of my
19· · recollection.· I don't remember exactly.
20· · · · Q.· And what was the other one you
21· · mentioned, I'm sorry?
22· · · · A.· Series 63.
23· · · · Q.· And when did you receive that
24· · license?
25· · · · A.· Same time.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· And do you currently hold those
·3· · licenses -- withdrawn.
·4· · · · · · Are there any other professional
·5· · licenses you've ever held?
·6· · · · A.· No.
·7· · · · Q.· Do you still hold a Series 7
·8· · license?
·9· · · · A.· No.
10· · · · Q.· Why not?
11· · · · A.· I gave it back.· We did a
12· · resignation back in 2007.· You saw this
13· · letter.
14· · · · Q.· What do you mean a resignation?
15· · Explain; you know, was your license revoked
16· · by FINRA?
17· · · · A.· No.· It was a mutual -- I gave it --
18· · I returned it.· I gave it back.
19· · · · Q.· Voluntarily?
20· · · · A.· Yes.
21· · · · Q.· Was it part of any investigation by
22· · FINRA into wrongdoing?
23· · · · A.· No.
24· · · · Q.· So why did you voluntarily give up
25· · your Series 7 license?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· So back when I was at Montauk
·3· · Financial, they -- we were trying -- my
·4· · partner and I were, Harry Friedman, we were
·5· · going to apply for our own broker/dealer
·6· · license.· And when we put in our application
·7· · we had to show where we got funds to back up
·8· · the broker/dealer.
·9· · · · · · So when we showed them everything,
10· · for all transparency, there was a company
11· · that we sold shares in that we made money on
12· · personally.· And they asked us about it and
13· · that was it.
14· · · · · · Then they came back and asked us if
15· · we had -- because we were working at Montauk
16· · Financial, they wanted to know if we had
17· · permission, personally, nothing to do with
18· · clients, to buy the shares, and, obviously,
19· · sell the shares, you need permission.
20· · · · · · And at that point we did have
21· · permission, and they asked us for the
22· · documentation to back it up, and we -- the
23· · letter that we got was, we had some kind of a
24· · flooding, to the best of my recollection at
25· · our office on 80 Broad Street.· And all our
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·1· · · · · · · · · ·Joseph Schnaier
·2· · documents, a lot of our computer -- a lot of
·3· · stuff got damaged.
·4· · · · · · So they went back to Montauk
·5· · Financial to ask them for the documents and
·6· · by then the owner of Montauk Financial sold
·7· · the firm, I believe, that's my
·8· · recollection -- the best of my recollection.
·9· · And the new management, the new ownership,
10· · didn't have it or there was something going
11· · on -- for some reason they didn't have it
12· · either.
13· · · · · · So then they went back -- they filed
14· · a -- they said, Okay, if no one has it, that
15· · means you didn't get permission, they
16· · assumed.· And they brought us in for a, I
17· · guess, it was a panel, an arbitration,
18· · whatever you want to call it.· And they
19· · wanted full -- it ended up after hearing the
20· · whole case, we only got fined like 77,000 and
21· · some -- and a sit-out for, I think, a couple
22· · of months.
23· · · · · · But throughout that whole process,
24· · which to me was really, you know, not right,
25· · I got pretty disgusted with that whole
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·1· · · · · · · · · ·Joseph Schnaier
·2· · industry, the way they went about it.
·3· · · · · · And by that time, by that year, I
·4· · spoke to my attorney and we had said we're
·5· · out of it.· I'm not paying the fine, I'm not
·6· · sitting out, you can have your license back.
·7· · · · · · I was already just disgusted by the
·8· · industry.· And that was pretty much the
·9· · story.
10· · · · Q.· Well, I'm going --
11· · · · A.· Really what disgusted me the most --
12· · · · Q.· All right, Mr. Schnaier.· You
13· · answered my question.· I don't want to
14· · hear --
15· · · · A.· I'm not finished.
16· · · · · · · ·MR. WURTZEL:· Steve, let him
17· · · · ·finish the answer.· Hold on.· What
18· · · · ·was the question?
19· · · · · · · ·MR. ISSER:· The question was
20· · · · ·whether --
21· · · · · · · ·MR. WURTZEL:· No, no, I'm
22· · · · ·asking the court reporter what the
23· · · · ·question was.
24· · · · · · · ·MR. ISSER:· Okay.· Read back
25· · · · ·the question, we'll see how far off
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·point we got.
·3· · · · · · · ·Read back the question.
·4· · · (Whereupon, at this time, the requested
·5· ·portion was read by the reporter.)
·6· · · · Q.· All right, go on.
·7· · · · · · · ·MR. WURTZEL:· His answer was
·8· · · · ·entirely responsive.· He can finish
·9· · · · ·the answer.
10· · · · Q.· Okay, finish your answer.
11· · · · · · · ·MR. WURTZEL:· You can continue,
12· · · · ·Joe.
13· · · · A.· What really, really got me upset was
14· · when they brought in the old owner of
15· · Montauk, this gentleman, Herb Kalinski, great
16· · guy.· We got along great with him, and he
17· · was -- he was getting up there in age.· And
18· · when they asked him about this letter
19· · permitting us to buy and sell the shares, he
20· · literally -- he said that he really had no
21· · recollection because he's on antidepressant
22· · medication and dementia medication.· You
23· · know, he had memory loss and stuff like that.
24· · And they still proceeded with the case.
25· · · · · · And that's really the reason I was,
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·1· · · · · · · · · ·Joseph Schnaier
·2· · you know, disgusted by this.· And I said,
·3· · enough, you know, I had enough.· And that's
·4· · probably -- maybe I made the right decision
·5· · or maybe I made the wrong decision, I don't
·6· · really know.· But that's where we are.
·7· · That's my answer.
·8· · · · Q.· When I asked you if you surrendered
·9· · your license in paragraph -- concerning tab
10· · 68, the exhibit whatever it is, you said it
11· · was not in connection with any investigation
12· · by FINRA, correct?· You surrendered your
13· · license because of your disgust.
14· · · · · · I want to turn your attention to --
15· · back to tab 68 and it says, at the very
16· · beginning, Pursuant to FINRA Rule 9216 of
17· · FINRA's code of procedure, Joseph Schnaier
18· · submits this letter of acceptance and waiver
19· · and consent with the purpose of proposing a
20· · settlement of the alleged rule violations
21· · described below.
22· · · · · · Now, this AWC is submitted on the
23· · condition that if accepted, FINRA will not
24· · bring any future actions against respondent
25· · unless the violations based on same factual
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·1· · · · · · · · · ·Joseph Schnaier
·2· · findings described therein.
·3· · · · · · Does that refresh your recollection
·4· · whether your surrendering of your license
·5· · was, in fact, part of a settlement concerning
·6· · a FINRA investigation?
·8· · · · ·form.
·9· · · · A.· That's what I was explaining to you.
10· · They found -- I guess the panel found that,
11· · you know, they fined us, I think it was
12· · $77,000, and a 90-day sit-out.· And that was,
13· · I guess, the -- I didn't -- that was, I
14· · guess, the consideration for me handing over
15· · the license, to the best of my recollection.
16· · · · Q.· All right.· But -- let's look at
17· · tab --
18· · · · A.· I wouldn't call that an
19· · investigation.· I mean, that wasn't really --
20· · it was more of an administrative issue. I
21· · mean, you can call it an investigation, but I
22· · wouldn't call it an investigation.
23· · · · Q.· Well, it's a settlement of alleged
24· · rule violation.· It was part of a settlement
25· · you surrendered your license, correct?
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·1· · · · · · · · · ·Joseph Schnaier
·3· · · · ·form.
·4· · · · A.· It was an administrative issue.
·5· · You're making it look like it was an
·6· · investigation.· It really wasn't an
·7· · investigation.
·8· · · · Q.· Well, what was the administrative
·9· · issue?
10· · · · A.· They wanted a letter, I explained
11· · that to you.
12· · · · Q.· All right.· Let's look at tab 67.
13· · · · · · · ·(Whereupon, at this time, the
14· · · · ·reporter marked the above-mentioned
15· · · · ·hearing panel decision as Defendants'
18· · · · Q.· Have you seen this document before?
19· · It says Financial Industry Regulatory
20· · Authority Office of Hearing Officers,
21· · correct?
22· · · · A.· Yes.
23· · · · Q.· This is the decision where you were
24· · fined the $77,000 and all that, correct?
25· · Everything you've been testifying to, this is
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·1· · · · · · · · · ·Joseph Schnaier
·2· · in this document, correct?
·4· · · · ·form.
·5· · · · A.· It looks like it.
·6· · · · Q.· All right.· And you're saying 68
·7· · concerns the same disciplinary proceeding --
·8· · Exhibit 1, rather, concerns the same
·9· · disciplinary proceeding as Exhibit 2.· I just
10· · want to make sure I understand.
11· · · · A.· I'm sorry, what was that?
12· · · · Q.· Does Exhibit 2 -- Exhibit 1 which is
13· · the letter of acceptance concerns the same
14· · disciplinary proceeding as Exhibit 2, which
15· · is the hearing panel's decision?
16· · · · A.· Exhibit 1?
17· · · · Q.· The hearing panel's decision and the
18· · letter of acceptance, waiver and consent, are
19· · you telling me they concern the same
20· · disciplinary proceeding?
21· · · · A.· To the best of my recollection, yes.
22· · That was the case.
23· · · · Q.· All right.· And where in Exhibit 1,
24· · which is tab 68, does it talk about you not
25· · giving a letter?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· What?
·3· · · · Q.· It says, Facts and violative
·4· · conduct.
·5· · · · A.· I don't know.
·6· · · · Q.· Well, it says, if you look under
·7· · facts and violative conduct under number two,
·8· · it says, Schnaier -- they requested your
·9· · appearance in connection with ongoing FINRA
10· · examination concerning 2006 and 2007 sales of
11· · shares of stock in a nonpublic corporation,
12· · Schnaier failed to appear for this requested
13· · OTR; is that correct?
14· · · · A.· I don't see anything about that.
15· · · · Q.· All right.
16· · · · A.· I mean, we had the company when they
17· · weren't public, but, yeah, I don't see
18· · anything in regards to that.
19· · · · Q.· I'm just trying to find where it
20· · says you're submitting -- you're resigning
21· · your license because you weren't giving them
22· · a letter.
23· · · · A.· Oh, that's not what I said to you.
24· · With all due respect, I didn't say that. I
25· · said I resigned -- I gave back -- I resigned
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·1· · · · · · · · · ·Joseph Schnaier
·2· · back my license because I was disgusted with
·3· · the whole way everything went about, and on
·4· · their end, I'm assuming, and I don't know
·5· · exactly, but they probably -- their deal was
·6· · to accept it without me making payment or
·7· · sitting out and just taking the license back.
·8· · Is that clear for you?
·9· · · · Q.· I don't know, we'll figure it out.
10· · · · A.· Okay.
11· · · · Q.· How many public properties have you
12· · had a role in in your -- as an investor or
13· · banker or management?· I'm not talking about
14· · just buying stock in General Motors.
16· · · · ·form.
17· · · · · · · ·THE WITNESS:· Just one second,
18· · · · ·can I get something for my daughter?
19· · · · · · · ·MR. ISSER:· Go ahead.
20· · · · · · · ·(Whereupon, a brief recess was
21· · · · ·taken.)
22· · · · A.· Was there a question?
23· · · · Q.· Yes.· Since you stopped acting as a
24· · broker, how many public companies have you
25· · invested in?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I don't recall any.
·3· · · · Q.· Really?
·4· · · · A.· Other than LiveXLive, I mean, Loton,
·5· · whatever you want to call it.
·6· · · · Q.· You didn't recall that.· Are there
·7· · any others that you recall?
·8· · · · A.· Well, I mean, obviously we're here
·9· · for that, so I know that you know that.· I'm
10· · thinking other than that, I don't recall any.
11· · · · Q.· How about nonpublic companies?· How
12· · many have you invested in?
13· · · · A.· Maybe -- just a couple.
14· · · · Q.· You mentioned the technology
15· · companies, right?
16· · · · A.· Yes.
17· · · · Q.· And Loton.· Any others?
18· · · · A.· Wantickets when they were private.
19· · That's really all, to the best of my
20· · knowledge, that's it.
21· · · · Q.· Did you have a management position
22· · with any companies?
23· · · · A.· No, just Wantickets.
24· · · · Q.· Now, is it a lifetime ban for you to
25· · trade in securities concerning when you
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·1· · · · · · · · · ·Joseph Schnaier
·2· · resigned your license?
·4· · · · ·form.
·5· · · · A.· I believe so.· I know when I gave it
·6· · back, I wasn't planning to come back anyway.
·7· · So it's possible it's a lifetime ban.
·8· · · · Q.· Now, concerning Exhibit 2, which is
·9· · the hearing panel decision, this concerns a
10· · company Majesco, correct?
11· · · · A.· Correct.
12· · · · Q.· They alleged that you illegally
13· · traded stock.· Is that part of --
14· · · · A.· No.
16· · · · ·Mischaracterizes.· The document
17· · · · ·speaks for itself.
18· · · · Q.· Have any investors ever sued you
19· · concerning your role in their investments?
21· · · · ·form.
22· · · · A.· Not as far as Majesco.
23· · · · Q.· Not Majesco.
24· · · · A.· Are we done with this exhibit?· Are
25· · we done with this exhibit?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Yes, we are.· I'm sorry.
·3· · · · A.· Oh, I didn't know that.· I'm sorry.
·4· · · · Q.· I'm going to withdraw that question.
·5· · · · · · Have you ever been involved in
·6· · taking companies public?· Do you know what
·7· · that term means?
·9· · · · ·form.
10· · · · A.· What is your definition of it?
11· · · · Q.· I'm asking you.· Have you ever heard
12· · the term going public or taking a company
13· · public?
14· · · · A.· Yes.
15· · · · Q.· Okay.· What is your understanding of
16· · what that term means?
17· · · · A.· My understanding is that a private
18· · company files to take their company public on
19· · one of the exchanges.
20· · · · Q.· All right.· Have you ever been
21· · involved in that process?
22· · · · A.· What do you mean by "involved?" I
23· · don't know what that means.
24· · · · Q.· Really?· Have you ever played a role
25· · in taking a company public?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· What, like, acting as the
·3· · investment -- explain, be more specific.
·4· · Because there's many roles in taking the
·5· · company public.
·6· · · · Q.· Any role.· Have you ever been
·7· · involved in any role in taking a company
·8· · public?
·9· · · · A.· That's a very vague question. I
10· · mean, it's not, you know, how do you answer
11· · something like that?· It's very
12· · unprofessional --
13· · · · Q.· I appreciate your criticism of my
14· · abilities, but I want to know the roles
15· · you've played in taking a company public.
16· · · · A.· Steve, I'm not trying to insult you.
17· · · · Q.· I'm not insulted at all.· I'm just
18· · surprised you said you find it a difficult
19· · question to answer.
20· · · · · · Have you ever been involved in
21· · taking a company public?· If I'd ask most
22· · people, they would have a pretty ready answer
23· · to that question.
24· · · · A.· No.· Because involved is not really
25· · a term that people use when you are saying
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·1· · · · · · · · · ·Joseph Schnaier
·2· · you're taking a company public.· I mean, it's
·3· · not -- I never heard that term.· If you could
·4· · ask me something more specific.
·5· · · · Q.· Did you ever participate in taking a
·6· · company public in any way?
·7· · · · A.· You mean as far as like buying IPO
·8· · stock and stuff like that?
·9· · · · Q.· Well, if you have that, yes,
10· · anything, not just dealer stock, you know.
11· · You know all the rules, you've been in this
12· · industry for 20 years.· You told me you're in
13· · private equity.· If you don't understand what
14· · that means, we can spend an hour on it, I
15· · guess, but I'm asking if you ever played a
16· · role or participated, rather, in taking a
17· · company public.
18· · · · A.· Sure, I have.
19· · · · Q.· Okay.· And tell me about those
20· · times.
21· · · · A.· I don't know.· I mean, I don't
22· · recall, you know, which ones, but have I
23· · invested or bought an IPO or stuff like that,
24· · I mean, it's possible I have, I'm sure.· But
25· · I don't recall anything specific.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· All right.· Putting aside maybe
·3· · buying stock from an IPO, have you ever
·4· · bought stock from an IPO rather from the
·5· · underwriters as opposed to on the market?
·6· · · · A.· Bought stock --
·8· · · · ·form.
·9· · · · A.· Bought stock from the underwriters.
10· · Well, if you buy stock from the underwriters,
11· · that is the IPO.· You're buying the IPO.
12· · · · Q.· All right.· I'm not going to get
13· · into it.· All right, fine.
14· · · · · · Do you know what a reverse merger
15· · is?
16· · · · A.· Yes, I do.
17· · · · Q.· What is a reverse merger?
18· · · · A.· It's when a -- you merge a private
19· · company into a publically-traded shell
20· · company.
21· · · · Q.· Have you ever participated in a
22· · reverse merger?
23· · · · A.· Yes, I have.
24· · · · Q.· For which companies?
25· · · · A.· Majesco.· And if you want to call
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·1· · · · · · · · · ·Joseph Schnaier
·2· · LiveXLive or Loton Corp. or whatever that is,
·3· · whatever those companies are.
·4· · · · Q.· Any other companies?
·5· · · · A.· Is that considered a reverse merger
·6· · to you or is that not --
·7· · · · Q.· I'm asking you, any other companies.
·8· · · · A.· To the best of my recollection, no.
·9· · · · Q.· Just Majesco?
10· · · · A.· Well, was LiveXLive and Loton Corp.
11· · considered a reverse merger?
12· · · · Q.· Putting LiveXLive and Loton Corp.
13· · aside.
15· · · · Q.· How did you meet Rob Ellin?
16· · · · A.· During the time of -- I met the
17· · owners of Majesco back in '90 -- it was the
18· · late '90s.· And we started speaking and they
19· · were interested, they had a really
20· · interesting video game company at that time.
21· · And they were interested in going public. I
22· · don't recall what firm I was with at that
23· · time, possible I was with Montauk Financial.
24· · And they asked if I can help them raise some
25· · capital.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · And my partner at the same -- around
·3· · that same time, within a week or so, his
·4· · mother passed away or his brother passed
·5· · away, I'm sorry, and someone came to him at
·6· · the shiva call, when he was sitting shiva, by
·7· · the name of Dan Meyers, who I knew as a kid,
·8· · not professionally, but as a kid before.
·9· · · · · · And he said that he mentioned, I
10· · guess, to my partner, Harry, that he may have
11· · a shell or some way to raise capital.· And
12· · then he brought Rob Ellin into the deal.· Rob
13· · had some shell called, to the best of my
14· · recollection, Connective Corp. or something.
15· · · · Q.· You answered my question, that's how
16· · you met Rob Ellin.
17· · · · A.· I'm not finished.
18· · · · · · · ·MR. ISSER:· You know what,
19· · · · ·let's mark this.· I would like you to
20· · · · ·mark these answers because I think
21· · · · ·we're going to need more time to
22· · · · ·finish this deposition and the
23· · · · ·question how did you meet Rob Ellin,
24· · · · ·you could argue what's responsive,
25· · · · ·but hearing about a shiva call and
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·Majesco and the whole lead off, I
·3· · · · ·think the witness is frankly wasting
·4· · · · ·time to try and stall the clock.· I'm
·5· · · · ·going to move on.
·6· · · · Q.· I'm going to ask you how many deals
·7· · have you done with Rob Ellin, either directly
·8· · or indirectly, for the company you were
·9· · involved with?
10· · · · A.· Can I finish how I met Rob Ellin
11· · because I didn't get to do that?
12· · · · Q.· You answered me.· Someone mentioned
13· · him at a shiva call.
14· · · · · · · ·MR. WURTZEL:· Hold on.· First
15· · · · ·of all, I object to the question.
16· · · · ·You asked an open-ended question, how
17· · · · ·did you meet somebody.· You want to
18· · · · ·ask a more specific question, who
19· · · · ·introduced you, can you do that?
20· · · · · · · ·MR. ISSER:· That's fine.· I'm
21· · · · ·asking a more specific question now.
22· · · · ·I've heard enough.
23· · · · · · · ·MR. WURTZEL:· So specify, get a
24· · · · ·little more specific and, Joe, answer
25· · · · ·just the specific question.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·THE WITNESS:· I'm sorry, Steve,
·3· · · · ·if I am taking too long.
·4· · · · Q.· You don't have to apologize.· How
·5· · many deals have you done with Rob Ellin,
·6· · either directly or indirectly, meaning either
·7· · with companies you were involved with or
·8· · personally?
·9· · · · A.· I wasn't directly involved with Rob
10· · Ellin.· He had that shell, like I said, he
11· · had the shell and I had -- I introduced the
12· · company.
13· · · · Q.· That's indirectly, Joe.· How many
14· · deals, I'm going to interrupt you again, Joe.
15· · I'm asking a specific question.
16· · · · · · How many deals have you been
17· · involved with with Rob Ellin, either through
18· · Rob personally or a company you were involved
19· · with or worked for, or a company Rob was
20· · involved with or worked for?· How many deals
21· · have you done with Rob Ellin?
22· · · · A.· Well, just those -- if you want to
23· · say involved, I don't know.· But just Majesco
24· · and LiveXLive.
25· · · · Q.· Nothing else?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Not that I recall.
·3· · · · Q.· Have you discussed this lawsuit with
·4· · anyone other than your counsel?
·5· · · · A.· I'm sure.
·6· · · · Q.· Okay.· Who?
·7· · · · A.· Everyone who knows me knows that I'm
·8· · dealing with this lawsuit.· They all know
·9· · what happened.· They all know Rob ruined my
10· · life.· So everyone who knows me is going to
11· · ask me about it.
12· · · · Q.· So you've been telling people that
13· · Rob ruined your life?
14· · · · A.· I don't have to tell anything,
15· · people see how everything happened.
16· · · · Q.· What have you been telling people
17· · about Rob Ellin?
18· · · · A.· You know, I tell them whatever I
19· · feel.
20· · · · Q.· And what was that?
21· · · · A.· I'd rather not say.· It's not going
22· · to be anything -- the way I feel about him,
23· · that's it.
24· · · · Q.· What is that?· What have you told
25· · people about Rob Ellin?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·MR. WURTZEL:· I'm just going
·3· · · · ·to -- I think you understood it from
·4· · · · ·the response before, but you should
·5· · · · ·exclude anything that you've told to
·6· · · · ·counsel from your answer.· So you can
·7· · · · ·answer.· But exclude anything you've
·8· · · · ·told counsel about Mr. Ellin.
·9· · · · A.· I'll put it to you this way.· If I
10· · would have known prior to me doing the
11· · deal --
12· · · · Q.· I'm going to interrupt you, Mr.
13· · Schnaier, I'm interrupting you.
14· · · · A.· Why are you interrupting me?
15· · · · Q.· Because the question is, what have
16· · you told people about Rob Ellin?
17· · · · A.· I'm going to give it to you.
18· · · · · · If I would have known prior to doing
19· · the Wantickets deal with Rob what I know
20· · after the deal, and what people have told me
21· · about relationships with him and all this
22· · stuff that came out after, his dealings with
23· · other people, none of it was good.· I'm not
24· · in the -- I'm not a person that wants to talk
25· · bad about people.· I don't want to do that,
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·1· · · · · · · · · ·Joseph Schnaier
·2· · especially during the Jewish holidays.· So I
·3· · don't want to -- don't ask me what I think
·4· · about or what I told everyone because I don't
·5· · want to speak about, bad about him.· And a
·6· · lot -- I heard a lot of bad things about him
·7· · from other people's relationships with him,
·8· · and I really don't want to get into that
·9· · right now.
10· · · · Q.· That's fine.
11· · · · A.· And I'm hoping he doesn't talk bad
12· · about me either.
13· · · · Q.· It's not up to you, though.
14· · · · · · What bad things did you hear from
15· · other people about relationships with Rob
16· · Ellin?
17· · · · A.· Well, you know, the normal,
18· · everything that what he's done to me he's
19· · done to other people.
20· · · · Q.· And how did it come about that you
21· · learned these things?
22· · · · A.· After they see the lawsuit, people
23· · have been coming to me, like, Wow, I can't
24· · believe he did this to you, too.· Other
25· · people he's been in lawsuits with.· I mean,
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·1· · · · · · · · · ·Joseph Schnaier
·2· · you name it, it's been really bad.· As a
·3· · matter of fact, you know, it's horrible.
·4· · · · Q.· Did you ask anyone about Rob Ellin
·5· · before you got involved with Rob Ellin about
·6· · the LiveXLive Wantickets deal?
·7· · · · A.· I wish I did.· I don't remember. I
·8· · don't recall anything substantial about it.
·9· · Put it this way, I knew him from a distance
10· · and he came off really trustworthy to me. I
11· · have been with him at dinners and certainly
12· · before the deal, I met his wife or girlfriend
13· · or some of his kids.· I've been to his house.
14· · So, I mean, I really trusted him, you know,
15· · and, you know, it came back to bite me.
16· · · · Q.· All that trust was based on working
17· · through this deal both between LiveXLive and
18· · Wantickets, correct?
20· · · · ·form.
21· · · · A.· I'm talking about prior, you know,
22· · just prior to the deal when he was, you know,
23· · now that I see it now, he was courting me, I
24· · would say.
25· · · · Q.· Well, how well -- when was the first
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·1· · · · · · · · · ·Joseph Schnaier
·2· · time you and Rob discussed LiveXLive or
·3· · Loton?
·4· · · · A.· I was in L.A. with my father and I
·5· · was there for work for Wantickets since we
·6· · had our offices in L.A. as well.
·7· · · · Q.· When was that?
·8· · · · A.· I was with --
·9· · · · Q.· I asked when was the first time, Mr.
10· · Schnaier?· I didn't ask you about your
11· · father.
12· · · · A.· Why are you so combative?· I'm
13· · trying to tell you.
14· · · · · · · ·MR. ISSER:· We're going to need
15· · · · ·more than a day, Josh.· I will
16· · · · ·actually let you speak as much as you
17· · · · ·want.· Josh, will you be able
18· · · · ·stipulate I will be able to finish
19· · · · ·this deposition?
20· · · · · · · ·MR. WURTZEL:· Why don't we take
21· · · · ·a break?· We're going for an hour and
22· · · · ·15 minutes.· Why don't we take a
23· · · · ·break and come back?
24· · · · · · · ·MR. ISSER:· I would like to
25· · · · ·stipulate, you can talk as long as
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·you want.· Are you going to hold me
·3· · · · ·to one day with Mr. Schnaier or am I
·4· · · · ·going to be able to finish what I
·5· · · · ·need to finish?
·6· · · · · · · ·MR. WURTZEL:· I'm not
·7· · · · ·stipulating to anything right now.
·8· · · · ·We've been going for an hour.· So at
·9· · · · ·the end of the day, if you think that
10· · · · ·you need more time, then you'll --
11· · · · ·we'll discuss it at that point.· I'm
12· · · · ·not having that discussion when
13· · · · ·we're, you know, an hour, or over an
14· · · · ·hour into the deposition.
15· · · · · · · ·So let's take a five-minute
16· · · · ·break.
17· · · · · · · ·MR. ISSER:· We're not going to
18· · · · ·be able to have that discussion at
19· · · · ·the end of the day because I'm not
20· · · · ·going to know where I stand, I have
21· · · · ·to figure things out.· But let's take
22· · · · ·five minutes and we'll come back.
24· · · · ·taken at 10:45 a.m.)
25· · · · · · · ·MR. ISSER:· All right.· Back on
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·the record.
·3· · · · · · · ·For the record, the five-minute
·4· · · · ·break was a ten-minute break.· We
·5· · · · ·have to keep track of time.
·6· · · · · · · ·Ms. Court reporter, please keep
·7· · · · ·track of breaks and returns.
·8· · · · · · · ·Please read back the last
·9· · · · ·question.
10· · · (Whereupon, at this time, the requested
11· ·portion was read by the reporter.)
13· · · · Q.· Just give me the year and month, if
14· · you know it, was the first time you met Rob
15· · Ellin.· No, withdrawn.
16· · · · · · When was the first time you and Rob
17· · Ellin discussed LiveXLive or Loton.· If I say
18· · LiveXLive it includes Loton, do you
19· · understand that?
20· · · · A.· Yes.
21· · · · Q.· When was the first time you
22· · discussed LiveXLive or Loton with Mr. Ellin?
23· · · · A.· To the best of my recollection, it
24· · was either 2015 or '16.
25· · · · Q.· All right.· And between -- you met
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·1· · · · · · · · · ·Joseph Schnaier
·2· · Mr. Ellin in reference to the Majesco deal,
·3· · correct?
·4· · · · A.· Correct.
·5· · · · Q.· All right.· So between Majesco and
·6· · discussing LiveXLive with Mr. Ellin, how many
·7· · times have you communicated with Mr. Ellin?
·8· · · · A.· I don't remember if any, it's
·9· · possible I have, but I don't remember.
10· · · · Q.· You testified before that you knew
11· · him from afar.· I assume you meant him from
12· · afar before 2014 to 2016; is that accurate?
13· · · · A.· Through the Majesco deal.
14· · · · Q.· Right.
15· · · · A.· Yes.
16· · · · Q.· So you didn't really know Mr. Ellin
17· · well before starting off to discuss LiveXLive
18· · and Wantickets with him, correct?
19· · · · A.· I mean, I thought I knew him well.
20· · I don't -- I mean, well -- what do you mean
21· · well?
22· · · · Q.· Well, you said you hadn't really
23· · spoken to him before the Majesco deal, which
24· · was around 2007 -- withdrawn.
25· · · · · · Did you do any -- were you involved
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·1· · · · · · · · · ·Joseph Schnaier
·2· · in any deals with Mr. Ellin between the
·3· · Majesco deal and the LiveXLive Wantickets
·4· · deal?
·5· · · · A.· Not that I recall.
·6· · · · Q.· Okay.· So you knew him from afar,
·7· · you said.· When you said before that you knew
·8· · him from afar, were you referring to -- you
·9· · were referring, I take it, to the period
10· · before you started discussing Wantickets and
11· · LiveXLive; is that correct?
12· · · · A.· Yes.· I met him through Majesco,
13· · that's correct.
14· · · · Q.· No.· You said you knew him from
15· · afar.· Then you started discussing having
16· · dinners with him and going to his house.· For
17· · the period of time when you knew him from
18· · afar, is that the period up until you began
19· · discussing LiveXLive and Wantickets?
20· · · · A.· I believe so.
21· · · · Q.· Okay.· Did you and your counsel
22· · discuss any of the questions and answers
23· · during the break?
24· · · · A.· Yes.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·MR. ISSER:· That's not
·3· · · · ·privileged, Josh.
·4· · · · · · · ·MR. WURTZEL:· It's privileged.
·5· · · · · · · ·MR. ISSER:· You're not allowed
·6· · · · ·to discuss the questions and answers
·7· · · · ·at a deposition with a witness during
·8· · · · ·the break.· It is prohibited content.
·9· · · · · · · ·MR. WURTZEL:· I'm 100 percent
10· · · · ·sure that you're wrong about that.
11· · · · · · · ·MR. ISSER:· Mark it for a
12· · · · ·ruling.
13· · · · · · · ·MR. WURTZEL:· Hold on, I'm
14· · · · ·instruction -- Steve, I'm instructing
15· · · · ·the witness not to disclose any
16· · · · ·communications that he had with
17· · · · ·counsel.
19· · · · Q.· Did you and counsel communicate
20· · during the break concerning this deposition?
21· · · · · · · ·MR. WURTZEL:· Objection.· I'm
22· · · · ·instructing the witness not to
23· · · · ·answer.
24· · · · · · · ·MR. ISSER:· He answered it
25· · · · ·first.· So mark this for a ruling as
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·I do not think you're allowed to
·3· · · · ·discuss questions and answers.
·4· · · · · · · ·MR. WURTZEL:· I'm 100 percent
·5· · · · ·sure that you're wrong.· And the
·6· · · · ·witness's response, which was given
·7· · · · ·before I had an opportunity to object
·8· · · · ·and instruct him, is an inadvertent
·9· · · · ·waiver and we're not agreeing to any
10· · · · ·waiver.
11· · · · · · · ·MR. ISSER:· We'll take that up
12· · · · ·with the Court.· I'm not sure -- I'll
13· · · · ·look into it as well.· My
14· · · · ·understanding was -- all right.
16· · · · Q.· The period of time when you said you
17· · trusted Rob Ellin, that trust developed in
18· · between -- did that trust develop while you
19· · were discussing this deal, correct?
20· · · · A.· That trust?
21· · · · Q.· Withdrawn.
22· · · · · · You said you trusted Rob Ellin
23· · earlier, and I'm asking, did that trust
24· · develop while you were discussing the
25· · LiveXLive Wantickets transaction with
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·1· · · · · · · · · ·Joseph Schnaier
·2· · Mr. Ellin?
·4· · · · Q.· It was the Majesco deal where you
·5· · met Mr. Ellin, correct?
·6· · · · A.· Yes.
·7· · · · Q.· And in that -- turning back to
·8· · Exhibit 67, FINRA found it uncredible that
·9· · you had provided written notice concerning
10· · these trades to First Montauk; is that
11· · correct?
12· · · · A.· Possible; I'm not sure.· I don't
13· · recall.
14· · · · Q.· Well, we can go over this another
15· · time.· But you received -- just to be clear,
16· · you received tab 67, which is the FINRA
17· · hearing panel decision, you received this
18· · document from FINRA, correct?
19· · · · A.· To the best of my recollection, I
20· · received it.· I just don't remember it.· It
21· · was many years ago.
22· · · · Q.· And now, you said, did you ask --
23· · before you were testifying all the bad things
24· · people told you about Rob Ellin after you
25· · filed this lawsuit.· And I think you said you
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·1· · · · · · · · · ·Joseph Schnaier
·2· · did ask around about Mr. Ellin before
·3· · investing in LiveXLive or signing the asset
·4· · purchase agreement?
·5· · · · · · · ·MR. WURTZEL:· Objection of
·6· · · · ·form.
·8· · · · Q.· You don't recall whether you asked
·9· · around?
10· · · · A.· I don't -- specifically, I don't
11· · recall.
12· · · · Q.· Well, earlier you testified that as
13· · part of your due diligence, you would
14· · investigate the management team concerning an
15· · investment to see if there's honest -- if
16· · they're honest.
17· · · · · · What steps did you take before
18· · investing in LiveXLive or signing the asset
19· · purchase agreement to investigate the honesty
20· · of LiveXLive's management team?
22· · · · ·form.
23· · · · A.· Can you repeat that, please?
24· · · · · · · ·MR. ISSER:· Read back the
25· · · · ·question, please.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · (Whereupon, at this time, the requested
·3· ·portion was read by the reporter.)
·4· · · · A.· I mean, I looked at his bio. I
·5· · mean, if you look at his bio, it looks pretty
·6· · impressive.· He has a nice bio written up in
·7· · there, and just based on personal
·8· · relationship with him.
·9· · · · Q.· That bio, where did you get the bio?
10· · · · A.· I don't recall.
11· · · · Q.· Well, was it from one of -- by
12· · Rob -- I assume you're talking about Rob's
13· · bio, correct?
14· · · · A.· Rob Ellin's bio, correct.
15· · · · Q.· Did he provide you with this bio or
16· · was it on a website that he controlled such
17· · as LiveXLive's website?
19· · · · ·form.
20· · · · A.· I don't recall.· I don't remember.
21· · · · Q.· And you said it was based on your
22· · personal relationship with him, but you
23· · didn't really have a strong personal
24· · relationship with him before you began
25· · discussing the LiveXLive investment deal, did
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·1· · · · · · · · · ·Joseph Schnaier
·2· · you?
·4· · · · ·form.
·5· · · · A.· Prior to LiveXLive, no, we didn't.
·6· · · · Q.· So you analyzed his honesty within
·7· · the context of negotiating the deal with him,
·8· · correct?
10· · · · ·form.
11· · · · A.· Yes.
12· · · · Q.· When you were a broker, did you do
13· · further due diligence before recommending
14· · investments -- withdrawn.
15· · · · · · What bad things have you told people
16· · about Rob Ellin?
17· · · · A.· I mean, I told them the truth.
18· · · · Q.· Tell me -- I didn't ask --
19· · specifically, what have you been telling
20· · people about Rob Ellin?
21· · · · A.· Just what he did to me during this
22· · whole process.
23· · · · Q.· And what did he do to you?
24· · · · A.· Lied to me, defrauded me, ruined a
25· · lot of people's lives in my company, et
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·1· · · · · · · · · ·Joseph Schnaier
·2· · cetera.
·3· · · · Q.· And you've been telling people that?
·4· · · · A.· It's not a secret.
·5· · · · Q.· I didn't ask you if it's a secret.
·6· · I asked you if you had been telling people
·7· · that?
·8· · · · A.· People asked me, so I tell them the
·9· · truth.
10· · · · Q.· People -- have you discussed this
11· · lawsuit with David Wells?
12· · · · A.· I don't believe so.· I don't recall.
13· · · · Q.· Did you discuss whether to file a
14· · lawsuit with David Wells?
15· · · · A.· Yes.
16· · · · Q.· And when was that?
17· · · · A.· Are you talking prior to -- I would
18· · say it was sometime in the summer of 2017.
19· · · · Q.· After the asset purchase agreement
20· · was signed?
21· · · · A.· Yes.
22· · · · Q.· And what did you say to him and what
23· · did he say to you about filing a lawsuit?
24· · · · A.· He pretty much told me, Rob is Rob
25· · and you have to do what you have to do to
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·1· · · · · · · · · ·Joseph Schnaier
·2· · protect yourself.· He wasn't surprised what
·3· · Rob had done to me.· And then he said, you
·4· · know, he was trying not to get into the
·5· · middle, but he said, You have to do what you
·6· · have to do.· If you have to file a lawsuit,
·7· · you should file a lawsuit.
·8· · · · Q.· Well, what did you say to him to
·9· · provoke that response?
10· · · · A.· I didn't really have to say
11· · anything.· He was -- he knew what was going
12· · on, because he was seeing -- he saw
13· · everything.
14· · · · Q.· Why were you speaking to him?
15· · · · A.· Because he was the one -- we were
16· · speaking prior to that, too, even before we
17· · closed.· He was their, I guess, unofficial
18· · CFO.· And he handled most of the paperwork.
19· · He was sending me the documents and stuff for
20· · warrants, et cetera, so he -- so why wouldn't
21· · I speak to him?
22· · · · Q.· I wasn't clear.· The conversation in
23· · which you claim he told you to do what you
24· · got to do or file a lawsuit, what was the
25· · context in which he said that?· He just
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·1· · · · · · · · · ·Joseph Schnaier
·2· · called you up and said that or why did you
·3· · call him?· What was the point or the purpose
·4· · of the conversation, reason you were speaking
·5· · to him before that specific conversation?
·7· · · · ·form.
·8· · · · A.· I don't recall exactly how it
·9· · initiated.· I don't recall.
10· · · · Q.· Were you complaining to him about
11· · Rob during that conversation?
12· · · · A.· Possible.
13· · · · Q.· Well, why would he tell you, Do what
14· · you have to do and Rob is Rob?· Why would he
15· · just say all those things unprovoked, out of
16· · the blue?
17· · · · A.· Well, listen, he saw everything that
18· · Rob did, and he realized that he knows Rob
19· · was wrong, and he -- that was -- those were
20· · his words to me.
21· · · · Q.· I understand you say that.· But I'm
22· · just saying, what was the context in which he
23· · said that?· Just out of the blue while you
24· · were talking to him about something else, he
25· · volunteered those statements?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· No.
·4· · · · ·form.
·6· · · · A.· We were, obviously, talking about
·7· · this topic.
·8· · · · Q.· You say "obviously."· I'm asking
·9· · you, what did you say to him before he said
10· · that to you?
11· · · · A.· I don't recall that.· It was two or
12· · three years ago.
13· · · · Q.· Did you discuss this lawsuit with
14· · Richard Blakely?
15· · · · A.· Yes.
16· · · · Q.· And what did you say to him and what
17· · did he say to you about the lawsuit --
18· · withdrawn.
19· · · · · · How many times did you discuss this
20· · lawsuit with Richard Blakely?
21· · · · A.· Quite a few.
22· · · · Q.· How often did you speak with
23· · Mr. Blakely?
24· · · · A.· I speak to him, I don't know,
25· · whenever we speak, you know.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Once a week?
·3· · · · A.· I don't know about that.
·4· · · · Q.· Once a month?
·5· · · · A.· Yes.· Maybe more.
·6· · · · Q.· So you speak to Mr. Blakely about
·7· · once a month.· And did you discuss
·8· · Mr. Blakely's deposition with him?
·9· · · · A.· No.· I'm sorry, I'm just giving my
10· · daughter a document.
11· · · · Q.· Go ahead.
12· · · · A.· Just one second.
13· · · · Q.· How often have you discussed this
14· · lawsuit with him?
15· · · · A.· I mean, we discussed it, you know,
16· · whenever we speak.· We both are very upset
17· · about it.
18· · · · Q.· And have you ever discussed this
19· · lawsuit or the allegations in the complaint
20· · with any reporters or journalists?
21· · · · A.· Not really.
22· · · · Q.· Well, what does not really mean?
23· · · · A.· Not that I recall.· I mean, I
24· · don't --
25· · · · Q.· So you may have?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I may have.· I don't recall.
·3· · · · Q.· So you're not sure?· I just want to
·4· · be clear.· You're not sure if you discussed
·5· · this lawsuit with any reporters or
·6· · journalists?
·7· · · · A.· I don't think -- no.
·8· · · · Q.· Maybe, maybe not?
10· · · · Q.· Do you know if your counsel has
11· · discussed this lawsuit or the allegations in
12· · the complaint with any reporter or
13· · journalist?
14· · · · · · · ·MR. WURTZEL:· I'm going to
15· · · · ·instruct the witness not to answer
16· · · · ·that.· So the witness can answer the
17· · · · ·question, but you should exclude from
18· · · · ·your answer any knowledge that you
19· · · · ·have that's based solely on
20· · · · ·discussions that you've had with
21· · · · ·counsel.
22· · · · · · · ·So if you know the answer to
23· · · · ·the question based on information
24· · · · ·other than discussions with
25· · · · ·counsel -- please exclude from your
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·answer any information that you know
·3· · · · ·solely because of any information
·4· · · · ·that was told to you by counsel.
·5· · · · · · · ·You can answer the question
·6· · · · ·with that caveat, subject to that
·7· · · · ·instruction.
·8· · · · Q.· So what's the answer?
·9· · · · A.· I don't know.· I don't have an
10· · answer.· I don't recall.· Sorry.
11· · · · Q.· You don't recall if your counsel has
12· · had any conversations -- withdrawn.
13· · · · · · Did you discuss your deposition with
14· · anyone today?
15· · · · A.· No.
16· · · · Q.· I mean, the fact that you're having
17· · a deposition today, the discussion did not
18· · happen today.
19· · · · A.· Sure.
20· · · · Q.· Who did you discuss it with?
21· · · · A.· My attorney.
22· · · · Q.· Anyone else?
23· · · · A.· My wife.
24· · · · Q.· Anyone else?
25· · · · A.· Not really.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Did you prepare for this deposition
·3· · with counsel?
·4· · · · A.· Not really, not that I know of. I
·5· · wouldn't call it prepare.
·6· · · · Q.· How many times did you and counsel
·7· · discuss this deposition?
·8· · · · A.· Once.
·9· · · · Q.· And was that over the phone?
10· · · · A.· Yes.
11· · · · Q.· And how long was that conversation?
12· · · · A.· 30 minutes, approximately, to the
13· · best of my knowledge.
14· · · · Q.· And did you review any documents to
15· · prepare for this deposition?
16· · · · A.· No, I haven't.
17· · · · Q.· Was anyone else on the phone with
18· · you?
19· · · · A.· No.
20· · · · Q.· And who did you -- which counsel was
21· · on the phone call?
22· · · · A.· Josh Wurtzel.
23· · · · Q.· When was the last time you spoke
24· · with David Wells?
25· · · · A.· David Wells, I don't recall.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· All right.· And when was the last
·3· · time you spoke with Jim Sabo?
·5· · · · Q.· Did you ever discuss this lawsuit
·6· · with Jim Sabo?
·7· · · · A.· To the best of my knowledge, I don't
·8· · think I did.
·9· · · · Q.· All right.· What about Rebecca Sinn?
10· · Have you discussed this lawsuit with Rebecca
11· · Sinn?
12· · · · A.· Also I don't recall.
13· · · · Q.· Did you discuss this lawsuit with
14· · Sasha Edwards?
15· · · · A.· Maybe just that there is a lawsuit,
16· · but nothing really too much about it.
17· · · · Q.· And Carla Ortiz, have you discussed
18· · this lawsuit with Carla Ortiz?
19· · · · A.· No, not that I know of.
20· · · · Q.· All right.· Please open up tab 1.
21· · · · · · · ·MR. ISSER:· Please mark this as
22· · · · ·Exhibit 3.
25· · · · ·complaint as Defendants' Exhibit 3
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·for identification.)
·3· ·BY MR. ISSER:
·4· · · · Q.· This is Exhibit 3.
·5· · · · · · Do you recognize this document, Mr.
·6· · Schnaier?
·7· · · · A.· Yes, I do.
·8· · · · Q.· And what is it?
·9· · · · A.· It's the complaint from my entity
10· · against Rob Ellin and LiveXLive.
11· · · · Q.· The complaint in this lawsuit,
12· · correct?
13· · · · A.· Excuse me?
14· · · · Q.· Withdrawn.
15· · · · · · Did you review this document on or
16· · before April 10, 2018?
17· · · · A.· On or before, I believe I did.
18· · · · Q.· All right.· And to the best of your
19· · knowledge are the allegations in this
20· · document accurate?
21· · · · A.· To the best of my knowledge they're
22· · accurate.
23· · · · Q.· Any part not accurate?
24· · · · A.· To the best of my knowledge they're
25· · accurate.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Okay.· Turn to tab 2, please.· This
·3· · is Exhibit 4.
·6· · · · ·first amended complaint as
·7· · · · ·Defendants' Exhibit 4 for
·8· · · · ·identification.)
10· · · · Q.· This is, for the record, the first
11· · amended complaint in this action.
12· · · · · · Have you ever seen this document
13· · before?
14· · · · A.· I believe I did.
15· · · · Q.· And did you review it on or before
16· · May 23, 2018?
17· · · · A.· I believe so.· I don't recall,
18· · though, but I believe so.
19· · · · Q.· To the best of your knowledge, are
20· · the allegations in this document accurate?
21· · · · A.· To the best of my knowledge, they're
22· · accurate.
23· · · · Q.· Is any part not accurate?
24· · · · A.· I don't recall.· I don't -- to the
25· · best of my knowledge, it's accurate.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· To the best of your knowledge --
·3· · · · A.· And my recollection, excuse me.
·4· · · · Q.· To the best of your knowledge and
·5· · recollection, is any part not accurate?
·6· · · · A.· To the best of my knowledge and
·7· · recollection, it's accurate.
·8· · · · Q.· Please turn to tab 4.
·9· · · · · · · ·MR. ISSER:· Mark this, I guess,
10· · · · ·Exhibit 5.
13· · · · ·Plaintiffs’ responses and objections
14· · · · ·to Defendant LiveXLive Media, Inc.’s
15· · · · ·First set of interrogatories to each
16· · · · ·Plaintiff as Defendants Exhibit 5 for
17· · · · ·identification.)
19· · · · Q.· For the record, this is the
20· · plaintiffs' interrogatory's response in
21· · there.· Plaintiffs' responses and objections
22· · to defendants' LiveXLive Media's first set of
23· · interrogatories.
24· · · · · · Do you recognize this?
25· · · · · · · ·MR. WURTZEL:· Do you mean tab
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·3?
·3· · · · · · · ·MR. ISSER:· I think it's tab --
·4· · · · ·hold on, I pulled up the wrong
·5· · · · ·document.· It is tab 3, yes, correct.
·6· · · · ·Sorry.
·7· · · · Q.· Do you recognize this document?
·8· · · · A.· Which one?
·9· · · · Q.· Tab 3.· Plaintiffs' responses and
10· · objections to defendants' interrogatories.
11· · · · · · Is that your signature on the last
12· · page?
13· · · · A.· Yes.
14· · · · Q.· Did you review this document before
15· · you signed the last page?
17· · did.
18· · · · Q.· To the best of your knowledge, are
19· · the statements contained in these responses
20· · accurate?
21· · · · A.· To the best of my knowledge and
22· · recollection, they are.
23· · · · Q.· All right.· And please open up
24· · Exhibit 4, please -- tab 4, sorry.
25· · · · · · · ·MR. ISSER:· This is
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·defendants' -- for the record, it's
·3· · · · ·plaintiffs' response to document
·4· · · · ·request.
·7· · · · ·plaintiffs' response to document
·8· · · · ·request as Defendants' Exhibit 6 for
11· · · · Q.· Have you ever seen this document
12· · before, Mr. Schnaier.
13· · · · · · · ·MR. WURTZEL:· Sorry, what tab
14· · · · ·is this?
15· · · · · · · ·MR. ISSER:· Tab 4.· There are
16· · · · ·two tab 4s, I apologize.· Tab 4, not
17· · · · ·04.· I apologize.
18· · · · Q.· LiveXLive Media Inc.'s first set of
19· · document demands.
20· · · · · · Do you see that, Mr. Schnaier?
21· · · · A.· I do.
22· · · · Q.· Have you ever seen this document
23· · before?
25· · · · Q.· You don't recall if you've seen it
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·1· · · · · · · · · ·Joseph Schnaier
·2· · or you don't recall seeing it?
·3· · · · A.· I don't recall seeing it, but I
·4· · could have seen it.
·5· · · · Q.· Did there come a time when you
·6· · gathered documents to provide to your counsel
·7· · to be produced in this lawsuit?
·8· · · · A.· Sure.· Yes.
·9· · · · Q.· All right.· And what steps did you
10· · take?
11· · · · A.· Whatever my counsel advised me to
12· · do, I did.
13· · · · Q.· Well, what steps did you take to
14· · gather documents?
15· · · · A.· I believe I gave them access to my
16· · e-mails and they pulled them all out.· And
17· · anything that I had in hard cover, you know,
18· · pretty much, whatever they asked me for, I
19· · gave them, to the best of my ability.
20· · · · Q.· We were discussing -- you were aware
21· · of the business of Wantickets, correct?
22· · · · A.· Correct.
23· · · · Q.· All right.· And when I refer to
24· · Wantickets I'm referring to the business of
25· · Wantickets.· There's Wantickets entities,
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·1· · · · · · · · · ·Joseph Schnaier
·2· · whatever it is, there's Danco, there's owners
·3· · of Wantickets.· You understand when I refer
·4· · to Wantickets, unless I say otherwise I'm
·5· · referring to Wantickets and all of its
·6· · subsidiaries and affiliates.
·7· · · · · · Do you understand that?
·8· · · · A.· Okay.
·9· · · · Q.· All right.· Now, what is -- how
10· · would you describe the business that
11· · Wantickets performs, the services it performs
12· · or performed?
13· · · · A.· It's an online ticketing company
14· · with a sort of marketing op.
15· · · · Q.· And you have either worked at or
16· · owned shares at Wantickets since 2014,
17· · correct?
18· · · · A.· Correct.
19· · · · Q.· Now, if you could just pull up tab
20· · 5, please.
21· · · · · · · ·MR. ISSER:· Mark this.
24· · · · ·Wantickets' ownership structure as
25· · · · ·Defendants' Exhibit 7 for
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·1· · · · · · · · · ·Joseph Schnaier
·4· · · · Q.· Have you ever seen this document
·5· · before?· It's the Wantickets' ownership
·6· · structure, for the record.
·7· · · · A.· Okay.
·8· · · · Q.· Have you ever seen this document
·9· · before?
11· · · · Q.· Well, in looking at it, does this
12· · accurately reflect the ownership structure of
13· · Wantickets between May 2014 through July 13,
14· · 2016, on the bottom from July 2016 on until
15· · the sale of the LiveXLive?
16· · · · A.· Sure.· I don't recall, but it looks
17· · correct.· Actually -- I'll leave it alone,
18· · okay.
19· · · · Q.· Is it correct -- withdrawn.
20· · · · · · This document correctly reflects the
21· · ownership structure of Wantickets on those
22· · two dates; is that accurate?
23· · · · A.· I believe so.· To the best of my
24· · recollection, I believe so.
25· · · · Q.· Let's go to Exhibit 4, which is the
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·1· · · · · · · · · ·Joseph Schnaier
·2· · amended complaint.· I want to turn to
·3· · paragraph 31.
·4· · · · A.· 31?
·5· · · · Q.· Yes.· It says, Wantickets was an
·6· · event marketing and ticketing platform for
·7· · nightlife events across the country,
·8· · including the Wynn and Hard Rock Hotels in
·9· · Las Vegas.
10· · · · · · What time period is that referring
11· · to?
12· · · · A.· My 31 is different than your 31.
13· · · · Q.· You're on the amended complaint,
14· · which is tab 2?
15· · · · A.· Oh, you told me tab 4.
16· · · · Q.· No.· Tab 2.
17· · · · A.· Okay.· I'm on it.
18· · · · Q.· What period is contained in
19· · paragraph 31 that I just read referring to?
20· · · · A.· From -- this is probably, I mean,
21· · I'm not sure.· I don't recall.
22· · · · Q.· Well, let me ask you this.
23· · · · · · Did Wantickets perform the services
24· · it describes for other companies besides Wynn
25· · and Hard Rock?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Yes.
·3· · · · Q.· So why did you specifically mention
·4· · providing services for Wynn in paragraph 31?
·5· · · · A.· I don't understand the question,
·6· · sir.
·7· · · · Q.· Okay.· Wantickets had a lot of
·8· · different companies it was providing, again,
·9· · marketing and ticketing platform for
10· · nightclub events too, correct?
11· · · · A.· Correct.
12· · · · Q.· And you chose to include these two
13· · specifically, expressly refer to these two
14· · companies, correct?
15· · · · A.· Correct.
16· · · · Q.· Why did you choose Wynn as one of
17· · the two companies you would refer to in this
18· · paragraph?
19· · · · A.· I don't recall.· I'm not sure.
20· · Maybe it was just too much to list all of
21· · them.· I don't know.· I'm speculating, I
22· · don't know.
23· · · · Q.· Well, was Wynn one of the more
24· · impressive clients, in your opinion?
25· · · · A.· I would say.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· One of the bigger clients?
·3· · · · A.· Probably, yes.
·4· · · · Q.· Was one of the more nationally-known
·5· · clients?
·6· · · · A.· Possibly.
·7· · · · Q.· But just to be clear, when the asset
·8· · purchase agreement was signed, Wantickets was
·9· · no longer providing these services for Wynn;
11· · · · A.· When the asset purchase -- when we
12· · signed with LiveX?
13· · · · Q.· Yes.
14· · · · A.· No.· Wynn was no longer a customer.
15· · · · Q.· Do you know when Wantickets was
16· · formed?
17· · · · A.· I don't recall, but sometime -- it
18· · says here 1999.· So sometime around then.
19· · · · Q.· And were you involved in Wantickets
20· · when it was formed?
21· · · · A.· No, I wasn't.
22· · · · Q.· And in paragraph 33 of the
23· · complaint, you say, Schurr sold a majority of
24· · his interests in Wantickets to River North
25· · Group.· And you mention how many employees
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·1· · · · · · · · · ·Joseph Schnaier
·2· · and profits Wantickets had.
·3· · · · · · How do you know that's true?· Were
·4· · you involved in Wantickets in 2007?
·5· · · · A.· No.
·6· · · · Q.· So how do you know the information
·7· · in paragraph 33 is accurate?
·8· · · · A.· Because that was the information
·9· · given to us, to the best of my recollection,
10· · during the due diligence phase when we
11· · acquired Wantickets the first time.
12· · · · Q.· Do you know who Barak Schurr is?
13· · · · A.· Yes.
14· · · · Q.· Do you get along with him?
15· · · · A.· I mean, at times yes and at times
16· · no.
17· · · · Q.· Let's say before July of 2016 did
18· · you get along Barak Schurr?
19· · · · A.· Before 2016?
20· · · · Q.· Before July of 2016.· I'll represent
21· · to you that that's when he was terminated
22· · from Wantickets.
23· · · · A.· Yes.· By the time he was terminated,
24· · we weren't getting along.
25· · · · Q.· Why not?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· We had differences of opinion.
·3· · · · Q.· All right.· How did it come about
·4· · that you -- you eventually became involved in
·5· · Wantickets, in an investment with Wantickets,
·6· · correct?
·7· · · · A.· Correct.
·8· · · · Q.· And how did it come about that you
·9· · invested in Wantickets?
10· · · · A.· I was introduced to the company by
11· · someone I knew in New York who introduced me
12· · to Barak and Diego, and they introduced me to
13· · the River North Group.
14· · · · Q.· And if you look at paragraph 35, it
15· · says, Later in 2015, Mr. Schnaier put
16· · together an investor group, and it goes on,
17· · and you bought out Gamwant and RNG.
18· · · · · · How much did you pay to buy out
19· · Barak and RNG?
20· · · · A.· This was in 2014, not 2015.
21· · · · Q.· Yes.
22· · · · A.· Can you repeat the question, please?
23· · · · Q.· In 2014, you and an investor group
24· · purchased Wantickets, correct?
25· · · · A.· Correct.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· And how much did you personally
·3· · invest in this purchase?
·4· · · · A.· I don't recall exactly, but I don't
·5· · know.· I think the investor group put up the
·6· · money.
·7· · · · Q.· How much was it purchased for?· How
·8· · much money did the investor group pay for the
·9· · purchase?
10· · · · A.· Approximately, 13 plus million.
11· · · · Q.· And did you put any money into it?
13· · · · Q.· And did you -- who was in the
14· · investor group?
15· · · · A.· I had a family that I knew for many
16· · years prior to that.
17· · · · Q.· What family was that?
18· · · · A.· The Chehabar family.
19· · · · Q.· And did you go to them with this
20· · potential investment opportunity or did they
21· · approach you?
22· · · · A.· I believe I went to them.
23· · · · Q.· So you learned of the Wantickets
24· · opportunity and you went to the Chehabars to
25· · invest with you?
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·1· · · · · · · · · ·Joseph Schnaier
·3· · · · ·form.
·4· · · · A.· Actually, I don't recall exactly but
·5· · there may have been someone in between that
·6· · spoke to one of the family members.· And then
·7· · they came to me.· So maybe I didn't go to
·8· · them originally.
·9· · · · Q.· So they were the first -- they
10· · located the Wantickets investment
11· · opportunity?
12· · · · A.· No, I located the Wantickets, and I
13· · believe there was someone, a person in
14· · between that I spoke to about it.· And he may
15· · have mentioned it to one of the family
16· · members and then brought them, I guess.· They
17· · came to me.· I knew them for years.
18· · · · Q.· And how much money did you say you
19· · contributed to the purchase?
20· · · · A.· I don't recall.· They put up almost
21· · all of it or maybe all of it.
22· · · · Q.· Is it possible you didn't put any
23· · money into the purchase?
24· · · · A.· Yes.
25· · · · Q.· But you wound up owning six percent
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·1· · · · · · · · · ·Joseph Schnaier
·2· · of Wantickets, correct?
·3· · · · A.· That's correct.
·4· · · · Q.· So why did you -- if you didn't put
·5· · any money into the purchase or very little
·6· · money, why did you get a six-percent
·7· · ownership interest?
·9· · · · ·form.
10· · · · A.· I believe because I brought the
11· · company and they wanted me to -- I was going
12· · to be the one managing it.
13· · · · Q.· And do you know who Jeff Singer is?
14· · · · A.· I do.
15· · · · Q.· Who is he?
16· · · · A.· A broker from our firm.
17· · · · Q.· And was he involved in this
18· · acquisition?· Did he provide services in
19· · connection with this acquisition of
20· · Wantickets?
21· · · · A.· He tried.
22· · · · Q.· What does that mean?
23· · · · A.· It means he tried to put the
24· · money -- to help me raise the money and it
25· · didn't work out.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Did he eventually -- go on.
·3· · · · A.· I raised it on my own.
·4· · · · Q.· Did he sue you in connection with
·5· · the services he tried to provide?
·6· · · · A.· Yes.
·7· · · · Q.· And what happened with that -- what
·8· · was the result of that lawsuit?
·9· · · · A.· He claimed that even though he
10· · didn't raise the money and didn't get it
11· · done, he said that the way the agreement was
12· · written, that he was deserving of a fee
13· · regardless.
14· · · · Q.· And what was the conclusion of that
15· · lawsuit?
16· · · · A.· I disagreed, we went to arbitration.
17· · And he won an award in arbitration.
18· · · · Q.· How much of an award?
20· · · · Q.· So the arbitrators -- withdrawn.
21· · · · · · Was that award ever paid?· Did you
22· · ever pay that award?
23· · · · A.· It was settled.
24· · · · Q.· I'm sorry?
25· · · · A.· Yes, we settled.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· That's not my question.· Did you pay
·3· · the award?
·4· · · · A.· Yes.
·5· · · · · · · ·MR. WURTZEL:· Hold on.· Just
·6· · · · ·objection to the form on the last
·7· · · · ·question.
·8· · · · · · · ·MR. ISSER:· We request all
·9· · · · ·documents concerning the payment --
10· · · · ·we request the award and payment of
11· · · · ·that award.
12· · · · · · · ·MR. WURTZEL:· We'll take it
13· · · · ·under advisement.
15· · · · Q.· The law firm Mintz Levine, did they
16· · represent you in the transaction once you
17· · acquired Wantickets?
18· · · · A.· Yes.
19· · · · Q.· Did you say yes?
20· · · · A.· I said yes.
21· · · · Q.· And did you pay -- did Mintz Levine
22· · sue you for unpaid legal fees in connection
23· · with their representation with the
24· · transaction?
25· · · · A.· Yes, they did.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· And they obtained a judgment against
·3· · you for those legal fees?
·4· · · · A.· I believe so.· Only because I signed
·5· · a personal guarantee, because we had a
·6· · difference of opinion of who owed the legal
·7· · fees.· And I felt bad, I ending up signing a
·8· · personal guarantee for it.
·9· · · · Q.· Who did you think owed the legal
10· · fees?
11· · · · A.· The company.· The company,
12· · Wantickets, should have paid the legal fees.
13· · · · Q.· In tab 5, which is the ownership
14· · structure, which is Exhibit 7, I believe,
15· · which company did you think should have paid
16· · the legal fees?
17· · · · A.· I'm not sure, I don't recall. I
18· · signed personally anyway because I felt
19· · responsible.· I felt bad, and I ended up
20· · signing.
21· · · · Q.· Well, let me just make sure, I want
22· · to be clear.
23· · · · · · You wound up with this $13 million
24· · or some odd 13 million dollars in
25· · consideration was paid for the investment
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·1· · · · · · · · · ·Joseph Schnaier
·2· · group to acquire Wantickets.· You did not
·3· · contribute any money to that acquisition.
·4· · The investment -- the banker who you hired to
·5· · help raise money sued you and obtained an
·6· · award against you, because he wasn't paid.
·7· · The law firm that represented you in
·8· · connection with this transaction wasn't paid,
·9· · and sued you and obtained a judgment against
10· · you in connection with this transaction.· And
11· · you wound up with six percent of Wantickets
12· · after not contributing any money and not
13· · paying the people that helped you in the
14· · transaction.
15· · · · · · Is there any part of that statement
16· · that's not accurate?
18· · · · ·form.· Mischaracterizes the
19· · · · ·testimony.
20· · · · A.· Jeff Singer never performed and
21· · didn't raise not one penny for helping me
22· · finance the deal.· It just happened that he
23· · put in the agreement or the way it was read
24· · to the arbitrators or the way the agreement
25· · was read, I ended up -- he ended up getting
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·1· · · · · · · · · ·Joseph Schnaier
·2· · an award.
·3· · · · · · Let me get this straight, he knows
·4· · he did not do anything to help do what he was
·5· · supposed to do to get the fee.· So he got
·6· · that, fine.
·7· · · · · · As far as the legal fees, there was
·8· · a disagreement on who should pay the fee, the
·9· · legal fees.· And because I didn't want to
10· · leave them hanging, I personally signed for
11· · it.· And I did that in good faith.
12· · · · Q.· But the fact remains, they weren't
13· · paid.· There was an award against you.· It's
14· · your position the award against you in the
15· · Jeff Singer case was wrongly decided, the
16· · legal fees case against Mintz Levine you
17· · shouldn't have been liable for, and, in
18· · addition, the hearing panel's decision in
19· · FINRA, which was Exhibit 2, was also wrongly
20· · decided.· Is that your position?
22· · · · ·form.
24· · · · A.· I gave you my answer.
25· · · · Q.· They were all wrongly decided or
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·1· · · · · · · · · ·Joseph Schnaier
·2· · they were not?· I don't know that I
·3· · understand your answer.
·4· · · · A.· I'm not here to judge wrong and
·5· · right, but they were decided so we'll take it
·6· · as that.
·7· · · · Q.· Why didn't you produce the documents
·8· · concerning the transaction by which Gamwant
·9· · purchased Wantickets?
10· · · · A.· Excuse me?
11· · · · Q.· Why didn't you produce the
12· · transaction documents -- withdrawn.
13· · · · · · When Gamwant purchased Wantickets
14· · were agreements signed between Mr. Schurr's
15· · investment group -- withdrawn, between RNG
16· · and the investor group or Gamwant?
17· · · · A.· Yes, closing documents.
18· · · · Q.· And why weren't those closing
19· · documents produced in this case?
21· · · · ·Objection to form.· I think you're --
22· · · · ·I think they were.· But -- well, I'm
23· · · · ·objecting to the assumption
24· · · · ·underlying the question.
25· · · · Q.· Do you have those closing documents?
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·1· · · · · · · · · ·Joseph Schnaier
·3· · · · · · · ·MR. ISSER:· We request
·4· · · · ·production of them, because I don't
·5· · · · ·have them.
·6· · · · · · · ·MR. WURTZEL:· We'll take it
·7· · · · ·under advisement.
·8· · · · · · · ·MR. ISSER:· You just said they
·9· · · · ·were produced.
10· · · · · · · ·MR. WURTZEL:· I'm looking at
11· · · · ·your tab 6, which has a plaintiffs'
12· · · · ·Bates stamp on it.
13· · · · · · · ·MR. ISSER:· Which is not the
14· · · · ·transaction documents between Gamwant
15· · · · ·or the investor group and RNG.
17· · · · Q.· Please open tab 6.
18· · · · · · · ·MR. ISSER:· For the court
19· · · · ·reporter, please mark this.· I assume
20· · · · ·it is Exhibit 8.
23· · · · ·Gideon Asset Management LLC letter as
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·3· · · · Q.· Tab 6, which is Exhibit 8 is a
·4· · letter from Gideon Asset Management LLC to
·5· · Joseph Schnaier, dated May 8, 2014.
·7· · Schnaier?
·8· · · · A.· I don't really recall it.
·9· · · · Q.· Well, is that your signature on the
10· · last page?
11· · · · A.· Yes, it is.
12· · · · Q.· And this is an agreement between you
13· · and Gideon Asset Management, correct?
15· · · · Q.· And how did this agreement come
16· · about?
18· · was negotiated with all parties.
19· · · · Q.· Okay.· Read section 6.· It says you
20· · will have a $300,000 annual salary payable
21· · bi-weekly to be reduced to 250,000 if
22· · Wantickets doesn't make the minimum of
23· · 2,050,000 net profit.
24· · · · · · Did you ever receive the full
25· · $300,000 salary?
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·1· · · · · · · · · ·Joseph Schnaier
·3· · · · Q.· Did Wantickets ever -- did
·4· · Wantickets make any net profit since 2014
·5· · when you became involved?
·6· · · · A.· Possible.· I don't recall.
·7· · · · Q.· It's possible that Wantickets made a
·8· · profit?
·9· · · · A.· It's possible.· I really don't
10· · recall.· I don't recall.· I don't want to
11· · give you the wrong information.
12· · · · Q.· Well, you -- all right, let's look
13· · at number 7.
14· · · · · · It says, From the day hereof through
15· · the date that is 180 days from the date
16· · hereof Joseph Schnaier shall have an option
17· · to purchase an additional 17 percent.
18· · · · · · Did you ever exercise that option in
19· · whole or in part?
20· · · · A.· No.
21· · · · Q.· Look at section 9.· It says, Joseph
22· · Schnaier acknowledges that he is indebted to
23· · Isaac Chehabar an amount equal to $300,000.
24· · · · · · Why did you owe him this money?
25· · · · A.· I don't remember.· I don't recall.
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Do you know if you were paid this
·3· · money?
·5· · · · Q.· Do you know if Mr. Chehabar ever
·6· · purchased shares from you because of the
·7· · nonpayment, as set forth in section 9?
·8· · · · A.· I don't believe he purchased shares
·9· · from me.· I don't recall.
10· · · · Q.· And you don't know that you paid the
11· · $300,000, correct?
12· · · · A.· No, I don't remember what it was
13· · for, sorry.
14· · · · Q.· Number 10 -- well, but that's a
15· · different question.
16· · · · · · Do you dispute that you owed him
17· · $300,000?
18· · · · A.· I'm not disputing that.
19· · · · Q.· Okay.· You signed this document,
20· · correct?
21· · · · A.· I'm not disputing it.
22· · · · Q.· Number 10, it says, Joseph Schnaier
23· · shall pay Gideon $150,000 fee for its
24· · services in connection with the purchase of
25· · RNG.
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · Did you ever pay any of that money?
·4· · · · Q.· And what services did they provide?
·5· · · · A.· To the best of my recollection, they
·6· · were supposed to make introductions for
·7· · ticketing and stuff.
·8· · · · Q.· And you don't remember if you paid
·9· · Gideon 150,000 or Isaac Chehabar the
10· · $300,000?
11· · · · A.· I don't remember.· I didn't.
12· · · · Q.· Is there a lot of debts that you
13· · often don't pay that you're not sure which
14· · ones you did and which ones you haven't?
16· · · · ·form.
17· · · · A.· I only recall those two debts.
18· · · · Q.· Well, is a $300,000 debt a large
19· · debt?
20· · · · A.· Well, this wasn't me personally.
21· · This was -- actually, it says it's
22· · Wantickets, but it says Joseph Schnaier --
23· · because I was managing Wantickets.
24· · · · · · I really -- I don't recall if they
25· · were paid or not.
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· This is before you bought
·3· · Wantickets.· This is dated May 8, 2015.· This
·4· · is when you're buying it.
·5· · · · · · · ·MR. WURTZEL:· No.· 2014.
·6· · · · A.· I bought it in 2014.
·7· · · · Q.· I understand that.
·8· · · · · · This says -- the first line says, in
·9· · connection with the consummation of the
10· · purchase of all the assets of RNG.· So this
11· · is part of the purchase, correct?
12· · · · A.· It looks like there was an agreement
13· · prior to the purchase of what was supposed --
14· · what was going to be done.
15· · · · Q.· So, wait, I just want to be clear.
16· · · · · · Paragraph 9, it's a personal debt of
17· · yours to Isaac Chehabar, that's what it says,
18· · correct?
19· · · · A.· Yes.
20· · · · Q.· And I'm asking you, is that a large
21· · personal debt of 300 -- do you have a lot of
22· · debts to people in the $300,000 range?
23· · · · A.· Not that I know of, no.
24· · · · Q.· So wouldn't you remember whether you
25· · repaid the $300,000 debt?
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·1· · · · · · · · · ·Joseph Schnaier
·3· · · · ·form.· He testified that he doesn't
·4· · · · ·remember.
·5· · · · Q.· All right.· If you would look now,
·6· · you allege in paragraph -- paragraph 33 of
·7· · the amended complaint, which is Exhibit 4 --
·8· · I'm sorry, the amended complaint was I think
·9· · tab 4.
10· · · · · · · ·MR. WURTZEL:· Tab 2 was the
11· · · · ·amended complaint.
12· · · · · · · ·MR. ISSER:· I'm sorry.· Tab 2.
13· · · · Q.· Do you see in paragraph 33, you
14· · allege that in 2010 Wantickets had 40
15· · employees and was generating 45 million --
16· · and was generating between 500,000 and one
17· · million dollars of annual profits?
18· · · · A.· Where are we looking?
19· · · · Q.· Paragraph 33.
20· · · · A.· Okay, I see it.
21· · · · Q.· All right.· How do you know that
22· · Wantickets had 40 employees and profits
23· · between 500,000 and a million dollars?
24· · · · A.· I believe it was based on, to the
25· · best of my recollection, it was based on the
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · due diligence we received.
·3· · · · Q.· Now, in paragraph 36 of the
·4· · complaint, you allege, Mr. Schnaier served as
·5· · Wantickets's CEO and he continued to grow
·6· · Wantickets.· Indeed in May 2016 Wantickets
·7· · had an, approximately, 20 to 25 employees.
·8· · · · · · Is it accurate that you were the CEO
·9· · of Wantickets before May 2016?
10· · · · A.· Before May 2016?
11· · · · Q.· Before.· Before May 2016.
12· · · · A.· No, I had a different title. I
13· · think I was -- to the best of my
14· · recollection, I was president.
15· · · · Q.· All right.· So paragraph 36 is
16· · inaccurate when it says as CEO you grew
17· · Wantickets in May 2016?
18· · · · A.· In 2016 I became CEO.
19· · · · Q.· And now it says, so whether this --
20· · what was your management role in Wantickets
21· · between the acquisition from RNG in 2014 and
22· · May 2016?
23· · · · A.· Like I said, to the best of my
24· · recollection, I think I was -- I had the
25· · president title.
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Well, what was Barak Schurr's title?
·3· · · · A.· I think he was also president.
·4· · · · Q.· So it's inaccurate in the complaint
·5· · at paragraph 36 where it claims you were the
·6· · CEO?
·8· · · · ·form.
·9· · · · A.· I was CEO starting 2016.
10· · · · Q.· And is it your belief that
11· · Wantickets grew between 2014 and 2016?
12· · · · A.· Grew?
13· · · · Q.· Well, you say -- this is your
14· · complaint.· You continued to grow Wantickets.
15· · Indeed by May 2016 it had approximately 20 to
16· · 25 employees.
17· · · · · · So I'm asking you, is it your
18· · opinion that Wantickets grew from when you
19· · became president or co-president or involved
20· · with Wantickets, to May 2016, that Wantickets
21· · grew?
23· · · · ·form.
24· · · · A.· I believe we were growing.
25· · · · Q.· Well, it had 40 employees in 2010,
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · correct?· At some point before you became
·3· · involved, rather, correct?
·4· · · · A.· Yes, but they had to do some cleanup
·5· · work.· There was an office in Canada that
·6· · they got rid of some employees and stuff like
·7· · that.
·8· · · · Q.· Right, but before you became
·9· · involved, there were 40 employees and by May
10· · of 2016, there were 20 to 25 employees.· So
11· · that's not growing, is it?
12· · · · A.· No, but we were shutting down --
14· · · · ·form.
15· · · · A.· We had to shut down Canada.· They
16· · were getting rid of some employees in Canada.
17· · They shut down the Canadian operation so that
18· · took away a bunch of employees.· And there
19· · were some other layoffs that turned down, you
20· · know, that was not necessary.
21· · · · Q.· Those were all decreasing, though.
22· · How did it continue to grow?
23· · · · A.· Well, we believe that the business
24· · was in the process of growing.
25· · · · Q.· Well, how did it, in fact; you say
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · you continued to grow the business from 2014
·3· · to 2016?
·4· · · · A.· Well, in --
·5· · · · Q.· You have to let me finish the
·6· · question.
·7· · · · · · I'm asking you, how did Wantickets
·8· · grow as a business in 2014 to May of 2016?
·9· · · · A.· We were planning on starting this
10· · seated ticketing software product.· And that,
11· · along with our original, you know, existing
12· · business, and we were looking to build out
13· · our marketing group, which was becoming
14· · really nice.· We were getting stronger and
15· · stronger on social media.· So we -- it was
16· · getting to be something really -- it was
17· · growing.
18· · · · Q.· Well, the tickets, wasn't that
19· · something that you starting working on after
20· · you acquired majority interest in Wantickets?
21· · · · A.· No.· That's something I started
22· · pushing hard after I became CEO in 2016.
23· · · · Q.· Right.· After you acquired majority
24· · interest, correct?
25· · · · A.· Right.· But that was already being
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·1· · · · · · · · · ·Joseph Schnaier
·2· · worked on already prior to that.
·3· · · · Q.· So you had plans for Wantickets to
·4· · grow by May of 2016.· In what ways had
·5· · Wantickets -- withdrawn.
·6· · · · A.· They were --
·7· · · · Q.· Withdrawn.· There's no question
·8· · pending.
·9· · · · · · Were you ever removed from your
10· · position as co-president of Wantickets?
11· · · · A.· Yes.
12· · · · Q.· When was that?
13· · · · A.· I believe it was -- I don't recall
14· · the exact date.
15· · · · Q.· Give me an approximate date.
16· · · · · · · ·MR. WURTZEL:· Steve, are you
17· · · · ·talking about before the APA or --
18· · · · · · · ·MR. ISSER:· Yes.
19· · · · · · · ·MR. WURTZEL:· -- or at any
20· · · · ·time?
21· · · · · · · ·MR. ISSER:· No.· I am talking
22· · · · ·about before the APA.· When he was
23· · · · ·co-president.
24· · · · A.· I don't remember the exact date. I
25· · don't want to just throw dates at you.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Well, was it in February of 2016?
·3· · · · A.· That's possible.
·4· · · · Q.· If I say any date, would it be
·5· · possible -- I'm asking you what your best --
·6· · · · A.· No.· It could be around that time,
·7· · I'm not disagreeing.
·8· · · · Q.· Who removed you?
·9· · · · A.· Jojo Chehabar.
10· · · · Q.· And why were you removed?
11· · · · A.· We had a disagreement on where the
12· · company was going.
13· · · · Q.· And so he removed you?
14· · · · A.· I believe so, yes.
15· · · · Q.· So if we look at Exhibit 8, which is
16· · tab 6, look at paragraph 5.· It says, Joseph
17· · Schnaier can be terminated from his position
18· · for cause as defined in the employment
19· · agreements of Barak Schurr and Diego Carlin.
20· · · · · · So did he have cause to remove you
21· · from your position?
22· · · · A.· I don't recall any cause.
23· · · · Q.· Did you have any authority to act on
24· · behalf of Wantickets after you were removed
25· · from your position?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· After?· No, I was just a
·3· · shareholder.
·4· · · · Q.· Okay.· But did you negotiate with
·5· · Rob or LiveXLive after you were removed?
·7· · · · Q.· You don't recall whether you did or
·8· · didn't?
·9· · · · A.· Yeah, I don't think I did.· I don't
10· · think so.
11· · · · Q.· Well, did you know Rob -- did you
12· · tell Rob that you had been removed?
13· · · · A.· I don't know if we were even in
14· · conversation about it.· I don't recall.
15· · · · Q.· Do you think you were removed in
16· · 2015 or 2016?
17· · · · A.· I think it was at the end of '15,
18· · beginning of '16 -- I honestly don't remember
19· · the date.
20· · · · Q.· All right.· But let's say end of
21· · '15, beginning of '16.· If you look at
22· · paragraph 41 of the amended complaints, you
23· · say, Ellin's pitch, which he delivered on
24· · multiple occasions beginning in the second
25· · half of 2015.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · So to the extent you were already
·3· · talking with Rob Ellin when you were removed
·4· · as manager -- withdrawn -- removed from your
·5· · position at Wantickets, did you tell Rob you
·6· · had been removed?
·7· · · · A.· I don't recall that.· It's possible
·8· · I did.
·9· · · · Q.· Were you ever locked out of
10· · Wantickets's database or computer system or
11· · e-mail account?
13· · · · ·form.
14· · · · A.· No.· Just -- not that I know of.
15· · · · Q.· No.· Well, when you were removed --
16· · · · A.· After they terminated my contract or
17· · me, they probably shut down the e-mail.
18· · · · Q.· Were you ever accused of using a
19· · company -- Wantickets' company money for
20· · personal expenses?
21· · · · A.· No, I don't recall that at all.
22· · · · Q.· No, that never came up?
23· · · · A.· Not that I recall.
24· · · · Q.· All right.· Turning back to growing
25· · of Wantickets.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · Do you know whether Wantickets'
·3· · financial condition increased or decreased
·4· · between your investment in 2014 and 2016 --
·5· · withdrawn?
·6· · · · · · In 2016 you acquired majority
·7· · interest in Wantickets, correct?
·8· · · · A.· Correct.
·9· · · · Q.· It was a company you controlled,
10· · correct?
11· · · · A.· Correct.
12· · · · Q.· So between 2014 when you first
13· · became involved in Wantickets and was
14· · co-president and acquiring the majority
15· · interest, do you know if Wantickets'
16· · financial condition got better or worse?
17· · · · A.· I believe it got a little worse.
18· · · · Q.· Okay.· Turn to tab 10, please.
21· · · · ·profit and loss statement as
25· · · · Q.· This is a profit and loss statement
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·1· · · · · · · · · ·Joseph Schnaier
·2· · of Wantickets for July 2014 through June
·3· · 2015.
·5· · Schnaier?
·6· · · · A.· No, I don't recall this document.
·7· · · · Q.· Do you know if this document is
·8· · accurate?
·9· · · · A.· I don't know.
10· · · · Q.· Well, according to this document,
11· · Wantickets lost over $150,000 for the
12· · one-year period July 2014 to July 2015.· This
13· · is the year you took over as co-president.
14· · · · · · Do you know if that's accurate?
15· · · · A.· That is, but they didn't -- the loss
16· · was -- a lot of it was sucked up by salaries
17· · from RNG and stuff like that.· It was -- in
18· · reality it was profitable.
19· · · · Q.· All right.· So let's look at the
20· · next year.
21· · · · · · Turn to tab 11, please.
24· · · · ·profit and loss statement as
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·1· · · · · · · · · ·Joseph Schnaier
·4· · · · Q.· This is the profit and loss
·5· · statement for Wantickets July 2015 through
·6· · June 2016.· This is the next year.
·7· · · · A.· What tab is this?
·8· · · · Q.· 11.· Have you ever seen this
·9· · document?
10· · · · A.· I don't recall this, no.
11· · · · Q.· Do you know if it's accurate?
12· · · · A.· I don't know.
13· · · · Q.· According to this document,
14· · Wantickets lost over $100,000 for this year;
17· · · · ·form.
19· · · · Q.· It's possible?
20· · · · A.· Yes.
21· · · · Q.· And gross ticket sales fell from 28
22· · million in July 2014 to 2015 to 16 million.
23· · Do you know if that's accurate, the 16
24· · million in 2015 to July 2016?
25· · · · A.· I don't know if that's accurate.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· I mean, you were co-president during
·3· · this time period, though, correct?
·4· · · · A.· I don't recall that happening.· It
·5· · might have.
·6· · · · Q.· Well, when you were co-president,
·7· · did you have information concerning
·8· · Wantickets's profits and losses?
·9· · · · A.· Of course.
10· · · · Q.· Do you have any reason to dispute
11· · the accuracy of these two profit and loss
12· · statements?
13· · · · A.· I don't have any reason, but I don't
14· · know where this came from so I couldn't tell
15· · you.
16· · · · Q.· Well, does this refresh your
17· · recollection whether Wantickets did worse
18· · after you stepped in in 2014?
19· · · · A.· If Wantickets lost $100,303?
20· · · · Q.· Yes.
21· · · · A.· It looks like it.· It could be true.
22· · · · Q.· Well, let me ask you this.· The year
23· · before you acquired Wantickets, did it make
24· · money or lose money?
25· · · · A.· It was right -- to the best of my
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·1· · · · · · · · · ·Joseph Schnaier
·2· · recollection, it was right around, I think,
·3· · they made a little bit of money or I don't
·4· · recall, honestly, I don't recall.
·5· · · · Q.· But it definitely started losing
·6· · money after you got involved, correct?
·8· · · · ·form.
·9· · · · A.· I wouldn't say that.
10· · · · Q.· Do you think it had a profitable
11· · year?
13· · · · ·form.
14· · · · A.· I don't know.· I've been in business
15· · for quite a while.
16· · · · Q.· No, after you got involved.· Since
17· · 2014, has Wantickets ever earned a profit for
18· · a one-year period?
19· · · · A.· We haven't -- I don't believe we've
20· · shown a profit.
21· · · · Q.· So it's lost money every year since
22· · you've been involved, correct?
23· · · · A.· I mean, it looks like it. I
24· · wouldn't -- I can't tell you by this
25· · document.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Well, the years that you were -- you
·3· · became CEO, not by this document, I'm asking
·4· · you.· You were co-president and then you
·5· · became CEO after you acquired a majority
·6· · interest, correct?
·7· · · · A.· Correct.
·8· · · · Q.· So except for the period you were
·9· · removed as co-president, you had a manager
10· · position at Wantickets since 2014, correct?
11· · · · A.· Correct.
13· · · · ·form.
14· · · · Q.· And it lost money every one of those
15· · years, correct?
16· · · · A.· Well, it looks like in 2015 it lost
17· · 103,000, correct?
18· · · · Q.· I'm asking, did it lose money every
19· · year since you became involved in 2014?
20· · · · A.· If, let's say, we lost 103,000 for
21· · the year, I mean, we lost a little bit of
22· · money, but no -- LiveXLive loses eight and a
23· · half million dollars a quarter, 30 million
24· · dollars --
25· · · · Q.· I didn't ask you about LiveXLive.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · The question is simple.
·3· · · · · · Mr. Schnaier, just listen to the
·4· · question.
·5· · · · · · Is it true that since 2014 when you
·6· · became involved with Wantickets, it has lost
·7· · money every year or not?
·8· · · · A.· To the best of my recollection, it's
·9· · possible.
10· · · · Q.· It's possible?
11· · · · A.· It's possible, yes.
12· · · · Q.· So you think it's possible
13· · Wantickets had a profit one year while you
14· · were CEO and president?
15· · · · A.· Depending on how, you know, they did
16· · the extent -- I don't remember.· Honestly, I
17· · don't recall.· I have to see the numbers.
18· · · · Q.· Let me ask you this.· On any of the
19· · financial information provided to LiveXLive
20· · concerning the asset purchase agreement, did
21· · any of that show that Wantickets had a profit
22· · for a longer period?
23· · · · A.· I'd have to go back and look at it,
24· · I don't recall.
25· · · · Q.· Well, Wantickets was making a profit
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·1· · · · · · · · · ·Joseph Schnaier
·2· · before you got involved, correct?
·3· · · · A.· They've been around many years.· So
·4· · it's possible they made a profit, you know,
·5· · through those years.
·6· · · · Q.· Well, they were involved -- they
·7· · formed in 1999, right, and you got involved
·8· · in 2014.· You know how many years.· You
·9· · allege in the complaint, they made a profit
10· · of 500,000 to one million dollars, correct?
11· · · · A.· I'm sure there are -- to the best of
12· · my recollection, there are years that they
13· · made a profit.
14· · · · Q.· Now, in the summer of 2016, you
15· · bought out -- you increased your ownership
16· · percentage of Wantickets, correct?
17· · · · A.· That's correct.
18· · · · Q.· And were agreements signed to
19· · increase your ownership percentage?
20· · · · A.· What do you mean?
21· · · · Q.· Well, you purchased Gamwant?
22· · · · A.· Correct.
23· · · · Q.· And you purchased Gamwant's interest
24· · in the company that you formed, correct?
25· · · · A.· Correct.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Were there any contracts or
·3· · agreements signed between Gamwant and that
·4· · company whereby Gamwant's ownership interest
·5· · in Wantickets was transferred to you?
·7· · · · Q.· And why weren't those documents
·8· · produced?
10· · · · ·form.
12· · · · A.· I don't know.
13· · · · Q.· Did you have those documents?
15· · · · · · · ·MR. ISSER:· All right.· We call
16· · · · ·for production of those documents.
17· · · · · · · ·MR. WURTZEL:· We'll take it
18· · · · ·under advisement, to the extent it
19· · · · ·wasn't produced.
20· · · · · · · ·MR. ISSER:· Well, I couldn't
21· · · · ·find them.
22· · · · Q.· How much did you pay -- I'm sorry,
23· · if you look at the ownership structure that
24· · was, we've previously discussed, you acquired
25· · 90 percent -- 90 percent interest -- I'm
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · sorry, 94 percent interest in Wantickets
·3· · pursuant to this -- withdrawn.
·4· · · · · · After this agreement was signed, you
·5· · owned an 84 percent interest in Wantickets --
·6· · withdrawn.· Give me a second, I'm confusing
·7· · myself.
·8· · · · · · After this transaction, in the
·9· · summer of 2016 you owned 90 percent of
12· · · · ·You're talking about directly?
13· · · · Q.· When I say you -- that's a very good
14· · point.
15· · · · · · Danco Enterprises LLC was formed by
16· · you for this transaction, correct?
17· · · · A.· Correct.
18· · · · Q.· And you own 100 percent interest in
19· · Danco, correct?
20· · · · A.· Yes.
21· · · · Q.· And Danco purchased 84 percent of
22· · Wantickets from Gamwant, correct?
23· · · · A.· Correct.· I believe so, to the best
24· · of my recollection, yes.
25· · · · Q.· Well, whoever held the Wantickets
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·1· · · · · · · · · ·Joseph Schnaier
·2· · interest, correct?
·3· · · · A.· Yes.
·4· · · · Q.· So the 6 percent you already owned
·5· · you ended up with between you and Danco, 90
·6· · percent of Wantickets was owned by you, the
·7· · companies you control charge, correct?
·8· · · · A.· Correct.
·9· · · · Q.· And how much money did you -- when I
10· · say you, for the purposes of this series of
11· · questions, when I say you, I mean Danco as
12· · well.
13· · · · · · So how much did you pay for 84
14· · percent of Wantickets in the summer of 2016?
16· · was somewhere around 5 million.
17· · · · Q.· All right.· And how did you make --
18· · how was that amount determined?
19· · · · A.· It was negotiated.
20· · · · Q.· How was Wantickets -- how was
21· · Wantickets evaluated?· How did you value
22· · Wantickets at that time?
24· · · · Q.· All right.· Let's turn to tab 12
25· · now.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·MR. WURTZEL:· Hold on, I'm
·3· · · · ·sorry, Steve.· You asked, I think,
·4· · · · ·two separate questions.· It's not
·5· · · · ·clear to me which one he answered.
·6· · · · · · · ·You asked how was the price
·7· · · · ·determined and then you asked how did
·8· · · · ·he evaluate the company.
·9· · · · · · · ·MR. ISSER:· Let's back up.
10· · · · · · · ·MR. WURTZEL:· It wasn't clear
11· · · · ·to me which one Mr. Schnaier
12· · · · ·answered.
14· · · · Q.· In entering into the transaction to
15· · acquire 90 percent of Wantickets, did you
16· · come to a conclusion as to what the value of
17· · Wantickets was?
18· · · · A.· Yes.· I believe the value was more
19· · than the 13 million that we paid originally
20· · for it.
21· · · · Q.· And how did you determine
22· · Wantickets's value?
23· · · · A.· Based on some of the plans we had
24· · for growing out the company.
25· · · · Q.· Are you referring to the seated
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·1· · · · · · · · · ·Joseph Schnaier
·2· · ticket?
·3· · · · A.· The seated ticketing platform was a
·4· · big part of it as well as the marketing arm
·5· · that we were building that, you know,
·6· · differentiated us from our competitors.
·7· · · · Q.· All right.· Let's turn to tab 12.
10· · · · ·draft membership interest purchase
11· · · · ·agreement as Defendants' Exhibit 11
12· · · · ·for identification.)
14· · · · Q.· Do you recognize this document?
15· · It's a draft membership interest purchase.
16· · · · · · Do you recognize this document, Mr.
17· · Schnaier?
18· · · · A.· I don't recall this document.
19· · · · Q.· It's a draft, but I'm going to ask
20· · you to turn to the second page.· And it says
21· · this is the agreement by which you would
22· · acquire the 84 percent we've been discussing,
23· · a draft of the agreement.· If you look at the
24· · second page for consideration, it says
25· · $4,800,000.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · Do you know if this was the final
·3· · price?
·4· · · · A.· I don't recall, but it's possible.
·5· · · · Q.· So if you purchased 84 percent of
·6· · Wantickets for 4.8 million, 100 percent of
·7· · the company would be worth $5,280,000,
·8· · correct?
·9· · · · A.· If I purchased at that price, I
10· · guess so.
11· · · · Q.· Or at least that's what the
12· · Chehabars or the people you were purchasing
13· · it for thought, correct?
14· · · · A.· Yes, I guess.
15· · · · · · · ·MR. WURTZEL:· Objection.· Calls
16· · · · ·for lack of personal knowledge.
17· · · · A.· I don't know what they thought.
18· · · · Q.· Well, do you know how the value was
19· · determined -- this is right before you signed
20· · the letter of intent.· This purchase was
21· · right before you signed the letter of intent
22· · with LiveXLive, correct?
23· · · · A.· I knew that they wanted to sell, get
24· · out of that business.· And they were going to
25· · take a deep discount to do so.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Why did they want to get out of the
·3· · business?
·4· · · · A.· It wasn't their core business.· They
·5· · were involved in clothing and real estate
·6· · really, and they weren't really, you know.
·7· · · · Q.· And if we look at Exhibit 11, at the
·8· · time of this valuation, ticket sales were
·9· · about $16 million for 2015 to 2016, and the
10· · business had lost 103,000, correct?
11· · · · A.· Is that all they lost was 103 on
12· · that?· It's possible, I don't know.· To the
14· · · · Q.· When you acquired the majority
15· · interest from Wantickets, did you intend to
16· · flip Wantickets and immediately sell it?
17· · · · A.· It was definitely spoken about. I
18· · was considering it.
19· · · · Q.· Just considering it?
20· · · · A.· Yeah, I mean, I spoke -- I was in
21· · talks with Rob Ellin while I was planning on
22· · doing it, and he excited me about his
23· · company.· And I thought it was -- it was
24· · going to be a good fit.
25· · · · Q.· So it wasn't just -- was it a
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·1· · · · · · · · · ·Joseph Schnaier
·2· · possibility or was it something you had
·3· · decided to do, to flip it?
·4· · · · A.· At what point?
·5· · · · Q.· When you acquired the majority
·6· · interest.
·7· · · · A.· It was a possibility.· And if the
·8· · offer made sense, then it would have -- I
·9· · would have done it.
10· · · · Q.· When did you acquire the majority
11· · interest according to this?
13· · was July of 2016.
14· · · · Q.· Okay.· Now, open up tab 13, please.
17· · · · ·complaint as Defendants' Exhibit 12
18· · · · ·for identification.)
19· ·BY MR. ISSER
20· · · · Q.· This is a complaint in the action
21· · Drovah Properties Limited against Danco
22· · Enterprises LLC.
23· · · · · · Did you ever see this document, Mr.
24· · Schnaier?
25· · · · A.· Yes, I have.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· All right.· Can you -- now, you took
·3· · out a loan from Drovah Properties and they
·4· · sued you for failing to repay the loan,
·5· · correct?
·7· · · · Q.· Now if you look at paragraph 6, it
·8· · says, In 2016, Defendant Schnaier approached
·9· · an agent of the plaintiff in pursuit of a
10· · loan.
11· · · · · · Paragraph 7 then says, Defendant
12· · Schnaier explained that he was attempting to
13· · complete a buy and flip transaction.· He,
14· · through Defendant Danco, would use the loan
15· · to acquire one company, referenced here as
16· · Company 1, which he would flip Company 1 for
17· · another company, referenced herein as Company
18· · 2, for a $16,500,000 profit.
19· · · · · · Do you see that?
20· · · · A.· Yes.
21· · · · Q.· Did you explain that to Drovah
22· · Properties in 2018?
24· · · · Q.· This is April.· This is before you
25· · completed your transaction to acquire
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·1· · · · · · · · · ·Joseph Schnaier
·2· · majority interest.
·3· · · · · · Is it true that you sought a loan
·4· · from Drovah to pay the $4.8 million or
·5· · whatever was paid to acquire the majority
·6· · interest in order to flip the company and
·7· · immediately sell it to LiveXLive?· Is that
·8· · what you told Drovah?
·9· · · · A.· Yes.· That was my consideration, but
10· · only if the deal was good from Loton Corp.
11· · · · Q.· Well, in paragraph 8 you say, Yes,
12· · this deal is already negotiated and agreed
13· · to, he stated on or about May 20, 2016.· And,
14· · yes, I will have this transaction finalized
15· · and the loan paid off within a 90-day term.
16· · · · · · Did you say those things to Drovah?
17· · · · A.· I believe so.· I don't recall,
18· · though.
19· · · · Q.· So now on May 20th, between April
20· · 2016 and May 20, 2016, you had already
21· · finalized the deal to sell the LiveXLive and
22· · anticipated paying off the loan soon after.
23· · Is that not what you told Drovah?
24· · · · A.· What is this?· This is a year later?
25· · · · Q.· No.· This is May 20, 2016, before
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·1· · · · · · · · · ·Joseph Schnaier
·2· · you finalized the majority interest.· This is
·3· · you seeking a loan to fund that acquisition,
·4· · correct?
·5· · · · A.· Yes.· I was seeking a loan to fund
·6· · the acquisition of Wantickets, to fund the
·7· · equity I didn't have, correct.
·8· · · · Q.· When you say the deal was already
·9· · negotiated and agreed to, you're discussing
10· · the transaction with LiveXLive to flip
12· · · · A.· I don't recall that, but I believe
13· · it's possible.· It's 2016, so Rob and I had
14· · been in discussions, yes.
15· · · · Q.· Right, but you're telling Drovah,
16· · unless you dispute that, you told him on May
17· · 20, 2016, the deal is already negotiated and
18· · agreed to.· And you told him you'd be able to
19· · pay off the loan in 90 days because you'd
20· · complete the flip.· Is that accurate, what
21· · you told Drovah on May 20, 2016?
23· · · · ·form.
24· · · · A.· I don't know.· It's possible, I
25· · don't recall exactly the conversation.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Well, this is before you entered
·3· · into the transaction to acquire majority
·4· · interest which closed in July 2016, correct?
·5· · · · A.· Correct.
·6· · · · Q.· So you weren't just considering
·7· · flipping.· You told Drovah that, Give me
·8· · money to acquire a majority interest because
·9· · I already have a deal to flip Wantickets and
10· · I'll be able to pay you back within 90 days,
11· · is that not accurate?
12· · · · A.· It was a possibility at that time,
13· · yes.
14· · · · Q.· Well, it was a possibility -- was it
15· · a possibility -- did you tell Drovah it was a
16· · possibility or did you tell Drovah you had
17· · already negotiated and agreed to a final
18· · deal?
19· · · · A.· I don't recall if I told -- I don't
20· · recall.· But it was definitely a possibility.
21· · · · Q.· Let me ask you this.· In May 2016,
22· · were you still co-president of Wantickets?
23· · · · A.· No.· I was not.
24· · · · Q.· So what authority did you have to
25· · negotiate with Rob and reach a deal that
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·1· · · · · · · · · ·Joseph Schnaier
·2· · would be negotiated and agreed to at this
·3· · time?
·4· · · · A.· Because to the best of my
·5· · recollection, I was already speaking to the
·6· · Chehabars, if I remember correctly, about
·7· · buying out their equity.
·8· · · · Q.· Did you tell Rob that you were
·9· · speaking to the Chehabars about buying out
10· · their equity?
11· · · · A.· I don't know what I told Rob.
12· · · · Q.· Did you tell Rob that you no longer
13· · had the authority to act for Wantickets
14· · concerning a sale to LiveXLive?
15· · · · A.· I mean, did I tell Rob -- excuse me,
16· · I'm sorry, I missed the question.
17· · · · Q.· Did you tell Rob -- when you say
18· · this deal is already negotiated and agreed
19· · to, while negotiating and agreeing to the
20· · deal with Rob to sell Wantickets to
21· · LiveXLive, did you tell them that you didn't
22· · have any authority at Wantickets to negotiate
23· · that deal?
24· · · · A.· No.· I believe I was very candid
25· · with him about the relationship I had with
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·1· · · · · · · · · ·Joseph Schnaier
·2· · the Chehabars and he knew -- he pretty much
·3· · knew what was going on.
·4· · · · Q.· So you told him that you had been
·5· · removed as co-president of Wantickets?
·6· · · · A.· I don't recall that.· I believe -- I
·7· · don't recall.· I'm sure I would have -- he
·8· · knew -- he pretty much knew all of that.
·9· · · · Q.· Well, how would he know if you
10· · didn't tell him?
11· · · · A.· It's possible I told him, I don't
12· · recall.
13· · · · Q.· And is it possible you didn't tell
14· · him?
15· · · · A.· Unlikely, but it's possible.
16· · · · Q.· And did you tell, when you
17· · negotiated the membership purchase agreement
18· · with the Chehabars, did you tell them that
19· · you had a deal to flip Wantickets for
20· · $16,500,000 purchase?
21· · · · A.· I don't recall what I told them, but
22· · they knew I was going to sell the company. I
23· · believe I told them.· I believe I told them.
24· · · · Q.· You believe you told them that you
25· · had already negotiated and agreed to a deal
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·1· · · · · · · · · ·Joseph Schnaier
·2· · with LiveXLive, and LiveXLive --
·3· · · · A.· At that time --
·4· · · · Q.· Let me finish the question.
·5· · · · · · And LiveXLive would acquire the
·6· · company for $16,500,000 profit on what you
·7· · bought their interest for?
·8· · · · A.· I don't recall speaking to them
·9· · about that.· But they weren't interested in
10· · any stock deals at that time.
11· · · · Q.· If you just scroll down to the note
12· · in the complaint, Exhibit A, part of the same
13· · exhibit.· Is that your signature on the note?
15· · · · Q.· It's signed in two places as the
16· · guarantor of Danco, correct?
17· · · · A.· Correct.
18· · · · Q.· And just to be clear, if you look at
19· · page 4 of the note, which is paragraph 16, it
20· · says, Equity kicker.· Lender is informed that
21· · borrower is contemplating a sale of the
22· · company once the same is acquired by
23· · borrower, to LiveXLive.· Upon the sale and
24· · transfer of the company, lender shall be
25· · entitled to receive from borrower and equity
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·1· · · · · · · · · ·Joseph Schnaier
·2· · kicker, which shall consist of $1,250,000
·3· · worth of post acquisition shares in LiveX.
·4· · · · · · So clearly, LiveXLive is the company
·5· · we've been speaking about, that you were
·6· · going to flip to, correct?
·7· · · · A.· If it was going to happen, it would
·8· · have got the kicker, yes.
·9· · · · Q.· Did they get the kicker?
10· · · · A.· Yes, they did.· I gave them the
11· · kicker.
12· · · · Q.· Did you default on the loan?· Did
13· · you ever pay Drovah back?
15· · · · ·form.
16· · · · A.· I defaulted on the loan because Rob
17· · didn't keep his word with me and I couldn't
18· · get liquid on the shares.
19· · · · Q.· And you bounced your checks to
20· · Drovah, correct?
22· · · · ·form.
24· · · · · · · ·MR. WURTZEL:· I object to the
25· · · · ·characterization of the term bounce.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·MR. ISSER:· Okay.
·3· · · · Q.· Do you know what the term bounced
·4· · checks means?
·5· · · · A.· Yes.
·6· · · · Q.· You wrote a check and you didn't
·7· · have money in the account to pay for the
·8· · check when it was cashed, correct?
·9· · · · A.· Yes.· But that check wasn't meant to
10· · be cashed.
11· · · · Q.· Really?· Let's turn to tab 13,
12· · please.
13· · · · A.· To my recollection.
14· · · · · · · ·MR. ISSER:· I'm sorry, tab 14.
17· · · · ·letter from Danco Enterprises as
21· · · · Q.· Tab 14 is two letters written on
22· · Danco Enterprises, LLC stationery letterhead,
23· · one dated March 5, 2018 and one dated March
24· · 10, 2018.
25· · · · · · Did you write these letters, Mr.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · Schnaier?
·3· · · · A.· Yes, I did.
·4· · · · Q.· All right.· And it says, Please be
·5· · advised -- first the letter of March 5th
·6· · says, Please be advised that repayment of the
·7· · loan to Danco Enterprises will be going out
·8· · on Wednesday, March 7th.
·9· · · · · · Did you ever send that wire?
10· · · · A.· No.
11· · · · Q.· Okay.· And the next page is July
12· · 10th.· It says, Attached is a check from
13· · Danco for $11,900,000.· Please be advised
14· · this is for full payment of the loan to Danco
15· · that could be deposited on Wednesday, July
16· · 18th.
17· · · · · · And then this check bounced,
18· · correct?
20· · · · ·form.
21· · · · A.· Yes.· But there was conversations
22· · after that with Drovah that it wasn't
23· · supposed to be deposited.
24· · · · Q.· Did you ever pay Drovah the amount
25· · of money it was owed on the loan?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· No.· Because Rob screwed me with the
·3· · shares.· I wasn't able to get out because he
·4· · defrauded me.
·5· · · · Q.· The answer is, no, you never paid
·6· · Drovah, did you?
·7· · · · A.· The answer is no, because Rob
·8· · defrauded me.· Rob Ellin and LiveXLive.
·9· · · · Q.· I understand it is Rob's fault.· And
10· · this complaint that Drovah filed, what is the
11· · status of that lawsuit?
12· · · · A.· It's in process.
13· · · · Q.· And just out of curiosity, why is it
14· · Rob's fault you couldn't pay Drovah?
15· · · · A.· He made commitments and promises
16· · prior to closing the acquisition and totally,
17· · totally lied and defrauded me after that.
18· · · · Q.· Well, but how did that -- I don't
19· · understand.· Be specific.
20· · · · · · You said it's Rob's fault you
21· · couldn't pay Drovah.· So what did Rob do to
22· · stop you from paying Drovah?
23· · · · A.· He didn't allow me to get the shares
24· · that he promised me.
25· · · · Q.· But then you got those shares,
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·1· · · · · · · · · ·Joseph Schnaier
·2· · correct?
·3· · · · A.· About a year and a half later, after
·4· · the company said they were valued at one
·5· · thing and it was really overvalued because
·6· · Rob over inflated everything, and lied about
·7· · the $100 million IPO, and then the stock was
·8· · worth 300 percent less, and he did a reverse
·9· · on top of that, which left me with almost
10· · nothing.
11· · · · Q.· So it was Rob's fault, I see.
12· · · · A.· No.· It's not -- it's Rob's fault
13· · that he said his stock was worth 4 to 500
14· · million valuation, and promised $100 million
15· · IPO, and then did a three-for-one reverse
16· · stock split.· And I had never seen a company
17· · probably in the history that the same time
18· · they did a three-for-one reverse stock split,
19· · which should be dollar for dollar, ended up
20· · getting lowered by 300 percent.· Because from
21· · my understanding, the company wasn't worth
22· · what he said it was worth.· And he was trying
23· · to, I guess, he thought he was smarter than
24· · everyone else.
25· · · · Q.· Well, when you invested in LiveXLive
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·1· · · · · · · · · ·Joseph Schnaier
·2· · and did the APA, what steps did you do to
·3· · determine the value of LiveXLive stock?
·4· · · · A.· Based on what he told me and sent me
·5· · on e-mails, and I spoke to the CFO, and
·6· · promises that Bank of Montreal did all their
·7· · due diligence, and even put a press release
·8· · out that they were going to do the IPO, I
·9· · think, between 12 and $14 a share.· And it
10· · was going to be 100 to 125 million.
11· · · · · · He said the deal was signed with
12· · Bank of Montreal, which I found out later
13· · wasn't true.· There wasn't anything signed
14· · and done.· They never got the IPO done, even
15· · though he said it would.· And the next thing
16· · I know is, he did that three-for-one reverse
17· · that was supposed to be just instead of 5 to
18· · 15, it ended up being worth $4 which turned
19· · my shares into, you know, 400 percent less.
20· · · · Q.· You keep telling me about what you
21· · discovered afterwards.· I'm asking you what
22· · steps did you take to confirm the accuracy of
23· · all the things Rob told you before you were
24· · obligated to sell?
25· · · · A.· Well, the day --
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·MR. WURTZEL:· Hold on. I
·3· · · · ·object to the form of the question.
·4· · · · ·Confirm the accuracy -- I didn't hear
·5· · · · ·the full question.· I heard, what did
·6· · · · ·you do to confirm the accuracy and
·7· · · · ·then it cut out after.
·8· · · · Q.· What steps, if any, did you take to
·9· · confirm the accuracy of anything Rob told you
10· · that you claim you relied on?
11· · · · A.· Well, number one --
13· · · · ·form.
14· · · · A.· The chairman and CEO of a public
15· · company.· So stuff that he -- information
16· · that he e-mailed me, I take it as gospel
17· · because he is a chairman and CEO of a
18· · publically-traded company.
19· · · · · · Number two is, there were -- you can
20· · even, for example, I'll give you, there was a
21· · press release that he was going to be going
22· · public at 12 to 14 or 13 to 15, I don't
23· · remember exactly per share and raising $128
24· · million or $100 million in an IPO through
25· · Bank of Montreal.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · Not only did he not end up getting
·3· · the deal from Bank of Montreal, which he
·4· · already put a press release out, he -- it was
·5· · worth 3 or 400 percent less after he took
·6· · everyone's shares down by three times the
·7· · amount.
·8· · · · Q.· What did you --
·9· · · · A.· I have never seen -- I don't know
10· · about you, but I, in my 20 years in the
11· · financial world, I have never seen a company
12· · that one day is worth 500 million, ready to
13· · go public, and then, literally, within days,
14· · the stock is now worth 100 million barely,
15· · and there was no news, nothing changed in the
16· · business, there was no -- nothing that I saw,
17· · and it was just over hype.
18· · · · Q.· You're not answering my question --
19· · · · A.· Let me finish.
20· · · · Q.· No.· What steps did you take to
21· · confirm it.· You've now given me --
22· · · · A.· I gave you an example, sir.· Let me
23· · finish.
24· · · · Q.· You're not answering the question.
25· · · · · · · ·MR. ISSER:· Josh, now he's
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·beyond the question.
·3· · · · Q.· Your attorney can depose you and ask
·4· · you anything he wants.
·5· · · · A.· I'm sorry you don't like my answer.
·6· · · · Q.· It's not about not liking your
·7· · answer, it's about time.· As soon as your
·8· · attorney tells me I'll get all the time I
·9· · need, you can talk as long as you want, Mr.
10· · Schnaier.· I want that on the record.
11· · · · · · Now, what proof, if any, do you have
12· · that when represented to you, the company was
13· · going to do $100 million IPO with Bank of
14· · Montreal to raise the share price you said --
15· · what proof do you have that Bank of Montreal
16· · and Rob Ellin didn't fully intend to do that?
18· · · · ·form.· Objection to form and
19· · · · ·mischaracterizes the testimony.
21· · · · A.· I thought I was clear about the
22· · stuff that I said.
23· · · · Q.· No.· I'm asking you for the proof.
24· · Is it possible that they anticipated $100
25· · million offering to raise what did you say it
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·1· · · · · · · · · ·Joseph Schnaier
·2· · was between 12 and 14 a share?· I forget the
·3· · numbers you used, but whatever you used to
·4· · say Rob said, is it possible they fully
·5· · intended to do that and it didn't work, and
·6· · he didn't lie to you?· Is that possible?
·8· · · · ·form.· Hold on.· And lack of personal
·9· · · · ·knowledge, to the extent that it's
10· · · · ·asking for what other people
11· · · · ·intended.
12· · · · · · · ·MR. ISSER:· All right.· Josh, I
13· · · · ·don't need a speaking objection.· You
14· · · · ·objected.
15· · · · Q.· You can answer, Mr. Schnaier.
16· · · · · · Is it possible that Rob didn't lie
17· · to you and he was as upset as you are that
18· · there wasn't $100 million offering at the
19· · share price --
20· · · · A.· How could it --
21· · · · · · · ·MR. WURTZEL:· Objection.· Lack
22· · · · ·of foundation --
23· · · · · · · ·MR. ISSER:· Objection is all
24· · · · ·you need to say.· I don't want a
25· · · · ·speaking objection.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·MR. WURTZEL:· Excuse me.
·3· · · · ·Objection.· Lack of personal
·4· · · · ·knowledge.· Calls for speculation.
·5· · · · · · · ·MR. ISSER:· All right.· Thank
·6· · · · ·you.· I will ask the grounds, if I
·7· · · · ·need them.
·8· · · · Q.· Mr. Schnaier, is it possible?
·9· · · · · · · ·MR. WURTZEL:· Objection.
10· · · · A.· How is it possible that one day --
11· · · · Q.· So the answer is no?
12· · · · A.· -- a day before you're announcing --
13· · a day before a public company is announcing
14· · an IPO by an extremely large investment bank
15· · with a great reputation that sent the e-mails
16· · that a deal is signed and done by Bank of
17· · Montreal and ready to go public, the next day
18· · that it's worth $500 million and then a day
19· · later, the IPO doesn't happen and not only do
20· · they do a reverse stock split where everyone
21· · got -- everyone got taken down hard, diluted,
22· · but -- and it didn't go back to the original
23· · price of $5 a share, it went back down to 400
24· · percent lower.
25· · · · · · So how is it possible that in one
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·1· · · · · · · · · ·Joseph Schnaier
·2· · day, with no news and no nothing to even
·3· · think about how this could possibly happen,
·4· · that a company went from $500 million to $100
·5· · million with nothing negative happening with
·6· · the company and only positive?
·7· · · · · · Because prior to that, they were
·8· · making announcements that they were doing
·9· · some serious acquisitions.· So there was
10· · nothing negative.
11· · · · Q.· Thank you, Mr. Schnaier.· You've
12· · answered the question.
13· · · · A.· So how is that possible?
14· · · · · · · ·MR. WURTZEL:· Let him finish.
15· · · · · · · ·MR. ISSER:· Josh, I asked him
16· · · · ·if it was possible.· His answer is
17· · · · ·no.· I didn't ask for ten minutes --
18· · · · · · · ·MR. WURTZEL:· Steve, if you're
19· · · · ·going to ask the question is
20· · · · ·something possible --
21· · · · · · · ·MR. ISSER:· It's yes or no.
22· · · · · · · ·MR. WURTZEL:· -- you have to
23· · · · ·expect that the witness is going to
24· · · · ·give an answer, which the witness is
25· · · · ·giving.· So let him finish.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·MR. ISSER:· I'm withdrawing the
·3· · · · ·question.· I don't have time for
·4· · · · ·this, unfortunately.
·5· · · · · · · ·THE WITNESS:· You do have time,
·6· · · · ·you just don't want to hear it.
·7· · · · · · · ·MR. ISSER:· We'll have to go to
·8· · · · ·the Court to get more time, I can
·9· · · · ·tell you right now.· I think the
10· · · · ·easiest thing to do is to agree that
11· · · · ·we'll be able to continue this
12· · · · ·deposition.
13· · · · · · · ·MR. WURTZEL:· I'm not agreeing
14· · · · ·to anything when we're three hours
15· · · · ·into the deposition.· I think the
16· · · · ·witness has been answering the
17· · · · ·questions as they're asked.· Ask
18· · · · ·specific questions.
19· · · · · · · ·MR. ISSER:· Let's go on then,
20· · · · ·let's save our time.
21· · · · · · · ·MR. WURTZEL:· If you ask more
22· · · · ·specific questions, the witness will
23· · · · ·give more specific answers.
25· · · · Q.· All right.· Do you know if in April
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·1· · · · · · · · · ·Joseph Schnaier
·2· · of 2016 there were discussions between
·3· · Wantickets and Eventbrite to sell Wantickets
·4· · to Eventbrite?
·5· · · · A.· I don't recall the dates, but I know
·6· · there were discussions.
·7· · · · Q.· All right.· And do you know if the
·8· · value of Wantickets for that deal was
·9· · discussed within Wantickets?
10· · · · A.· I wouldn't know that.
11· · · · Q.· Were you involved in those
12· · discussions?
13· · · · A.· No.
14· · · · Q.· Do you know how much -- do you know
15· · if Eventbrite made an offer to acquire
16· · Wantickets in April of 2016?
17· · · · A.· I heard they made an offer.
18· · · · Q.· And do you know how much Eventbrite
19· · agreed to pay to acquire Wantickets?
20· · · · A.· No.· I was told it was never
21· · anything serious.
22· · · · Q.· Were you ever told that they agreed
23· · to -- were you ever told how much?
24· · · · A.· I wasn't told how much, but I was
25· · told there was some stock deal and it was
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·1· · · · · · · · · ·Joseph Schnaier
·2· · never serious or taken serious.
·3· · · · Q.· All right.· Let's open tab 15,
·4· · please.
·7· · · · ·letter dated May 17, 2017 as
11· · · · Q.· This is a letter dated May 17, from
12· · Kobre Kim to Joseph Cohen.
13· · · · · · Do you see the re line there, Mr.
14· · Schnaier?· It's Wantickets RDM, v.
15· · Eventbrite, Inc.
16· · · · · · When you were CEO, Wantickets sued
17· · Eventbrite, correct?
18· · · · A.· Yes.
19· · · · Q.· And this -- and Joe Cohen was
20· · Wantickets' counsel, correct?
21· · · · A.· He was.
22· · · · Q.· All right.· And now, if you look at
23· · the second page of the bottom -- withdrawn.
24· · · · · · Did you see this -- did you review
25· · this letter after it was sent to Mr. Cohen?
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I'm sorry what was that?
·3· · · · Q.· Did you review this letter?· Have
·4· · you ever seen this letter before today?
·6· · · · Q.· Did you retain Mr. Cohen to
·7· · represent Wantickets?· You were in charge of
·8· · the decision to retain Mr. Cohen, correct?
·9· · · · A.· Correct.
10· · · · Q.· Okay.· Look at the second page of
11· · the letter, the final paragraph.· And it
12· · says, there's a second sentence, Eventbrite
13· · proposed to purchase Wantickets for the
14· · equivalent of $4 million consideration.
15· · · · A.· I don't see that.
16· · · · Q.· Second page of the letter, last
17· · paragraph, second sentence.
18· · · · A.· Second page of the letter.· I don't
19· · see it.
20· · · · Q.· You see the paragraph --
21· · · · A.· Oh, here page two, okay.
22· · · · Q.· All right.· Last paragraph, second
23· · sentence.· Eventbrite proposed to purchase
24· · Wantickets for the equivalent of $4 million.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I see that, okay.
·3· · · · Q.· All right.· Do you know if that was
·4· · true?· Did you take any steps to try to
·5· · determine whether that was true?
·6· · · · A.· I heard from the people inside that
·7· · it was never serious, anything serious.
·8· · · · Q.· I didn't ask you that.· Do you know
·9· · if there was a $4 million --
10· · · · A.· Oh, no, I don't know.
11· · · · Q.· You don't know.· All right.
12· · · · · · · ·MR. ISSER:· Let's turn to tab
13· · · · ·16.· You know what, it's 12:30 let's
14· · · · ·take a ten-minute break.
16· · · · ·taken at 12:32 p.m.)
18· · · · Q.· Before we get back to Eventbrite,
19· · the Majesco deal we were talking about, Rob
20· · Ellin was part of that deal, correct?
21· · · · A.· I believe he brought the shell, he
22· · had a shell company.
23· · · · Q.· Were you the finder on that deal?
24· · · · A.· I was the one who brought the
25· · company.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Right.· And how much money did you
·3· · make on that deal?
·5· · · · Q.· Was it a lot of money?
·7· · · · Q.· Did Rob make you the finder on that
·8· · deal?
·9· · · · A.· No.
10· · · · Q.· Who is Andy Meyers?
11· · · · A.· I don't know any Andy Meyers.
12· · · · Q.· Danny, sorry.· Danny Meyers?
13· · · · A.· He was the one who introduced us to
14· · Rob.
15· · · · Q.· He was your partner, correct, he was
16· · your partner?
17· · · · A.· No.
18· · · · Q.· Did you ever attend strip clubs and
19· · put it on Wantickets credit card?
20· · · · A.· No.
21· · · · Q.· I'm going to rephrase it.
22· · · · · · Did you ever go to a strip club and
23· · put it on a corporate credit card of
24· · Wantickets?
25· · · · A.· No.
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·1· · · · · · · · · ·Joseph Schnaier
·3· · · · ·form.
·4· · · · A.· Rob already pulled that crap.· He's
·5· · trying to be a wise guy.· It's nothing, he's
·6· · lying.
·7· · · · Q.· Rob is not in the room right now
·8· · just to be clear.
·9· · · · A.· He already made that threat.· It's
10· · nothing, it's not true.
11· · · · Q.· I'm asking you a question, all
12· · right?· So after you -- aside from
13· · Wantickets, aside from LiveXLive and Rob, did
14· · you try to sell Wantickets to anybody else?
16· · · · Q.· You don't recall if you tried to
17· · sell Wantickets to anybody else?· You became
18· · CEO in 2016 --
19· · · · A.· Oh, yes, I've had companies come to
20· · me to see if we could do a deal.
21· · · · Q.· What company?
22· · · · A.· Ticket Live.
23· · · · Q.· When was that?
25· · · · Q.· Okay.· Could you pull up tab 16,
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·1· · · · · · · · · ·Joseph Schnaier
·2· · please?
·5· · · · ·letter dated April 22, 2016 as
·9· · · · Q.· For the court reporter it's a letter
10· · on Eventbrite stationery to Diego Carlin,
11· · dated April 22, 2016.
12· · · · · · Have you ever seen this letter
13· · before?
14· · · · A.· Not that I recall.
15· · · · Q.· Well, it's -- this is a letter of
16· · intent between Eventbrite and Wantickets for
17· · Eventbrite to buy Wantickets for 200,000
18· · shares of Eventbrite, correct?
19· · · · A.· I don't know.
20· · · · Q.· Were you co-president of Wantickets
21· · at the time, on April 22, 2016?
22· · · · A.· I don't believe I was at that time.
23· · · · Q.· And, well -- but you owned shares in
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· So if Wantickets was sold to
·3· · Eventbrite, you would be selling your shares,
·4· · correct?
·6· · · · Q.· And did anyone tell you there was an
·7· · offer from Eventbrite for 200,000 shares of
·8· · Eventbrite stock in exchange for Wantickets?
·9· · · · A.· I was told there was some sort of an
10· · offer, but it was nothing serious.· It wasn't
11· · a real deal.
12· · · · Q.· So just so it is clear, if it's $4
13· · million to buy Wantickets you don't think
14· · that's serious?
15· · · · A.· Four million in stock for Wantickets
16· · that I think is worth -- we paid 13 million
17· · two years before.· I don't think that's
18· · serious.
19· · · · Q.· Well, but you purchased Wantickets
20· · on a valuation of a little over 5 million in
21· · the same time period, right?
22· · · · A.· Yes, but I --
23· · · · · · · ·MR. WURTZEL:· Hold on,
24· · · · ·objection to the form and to the
25· · · · ·characterization of the word
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·valuation.· It mischaracterizes the
·3· · · · ·testimony.
·4· · · · A.· I didn't pay what the valuation
·5· · should be.· I paid because there were certain
·6· · special circumstances that allowed me to buy
·7· · those shares for value less than I believe
·8· · it's worth.
·9· · · · Q.· Did you have negotiations -- did you
10· · have discussions, rather, with Rob between
11· · April 22, 2016 and July 1st, concerning
12· · LiveXLive acquiring Wantickets?
13· · · · A.· I don't recall, but I believe so. I
14· · don't recall exactly the dates.
15· · · · Q.· Do you know if Wantickets was
16· · allowed to be negotiating with other
17· · companies for their purchase during that time
18· · period pursuant to this letter of intent?
19· · · · A.· No, I didn't know.· I didn't know
20· · anything about this letter of intent.
21· · · · Q.· But according to the Drovah
22· · complaint you were negotiating with Rob in
23· · May of 2016, correct?
24· · · · A.· According to the complaint.
25· · · · Q.· Is that inaccurate?· Withdrawn.· We
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·1· · · · · · · · · ·Joseph Schnaier
·2· · already went over it.
·3· · · · · · Do you know if there are any offers
·4· · besides Evenbrite's offer to purchase
·5· · Wantickets up until April 22, 2016?
·6· · · · A.· I don't know.
·7· · · · Q.· Did you take part in evaluating the
·8· · value of Wantickets in relation to the
·9· · Eventbrite offer?· Withdrawn.
10· · · · · · When you acquired your -- when you
11· · acquired -- withdrawn.
12· · · · · · When you purchased Wantickets, did
13· · you agree to provide the Chehabars with a
14· · letter of credit?
15· · · · A.· You broke up a little, I can't hear
16· · you.
17· · · · Q.· When you were -- the Chehabars
18· · purchased Wantickets, did you agree to
19· · provide the Chehabars with a $10 million line
20· · of credit?
21· · · · A.· I don't recall anything like that.
22· · · · Q.· Go to tab 37, please.· I think I got
23· · that wrong.· One second.
24· · · · · · Tab 38, please.
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·above-mentioned amended complaint was
·3· · · · ·marked as Defendants' Exhibit 16 for
·4· · · · ·identification.
·6· · · · Q.· It's an amended complaint against
·7· · EB.
·8· · · · · · Do you recognize this document?
·9· · · · A.· Yes.
10· · · · Q.· This is an amendment of the
11· · complaint filed by Wantickets against
12· · Eventbrite, correct?
14· · · · Q.· And you were CEO when this document
15· · was filed, right?
16· · · · A.· Yes.
17· · · · Q.· Now, if you look at paragraph 23, it
18· · says, In the spring of 2016, the Chehabar
19· · family decided to sell Wantickets.· And then
20· · it says in paragraph 24, In April 2016,
21· · Wantickets and Eventbrite entered into a
22· · letter of intent.
24· · · · A.· Yes.
25· · · · Q.· So did you -- you made allegations
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·1· · · · · · · · · ·Joseph Schnaier
·2· · concerning the letter of intent in a
·3· · complaint that you authorized to have filed
·4· · which was filed in October 2017, correct?
·5· · · · A.· I guess so.· But what's -- I don't
·6· · understand your question.
·7· · · · Q.· So you had said you had never seen
·8· · the letter of intent.· I'm asking you how you
·9· · managed to have Wantickets referred to it in
10· · a complaint at a time where you initiated the
11· · complaint.
12· · · · A.· Oh, because this complaint -- this
13· · complaint was done after I already acquired
14· · the company.· So I saw all the back stuff.
15· · That's why it was in there.
16· · · · Q.· So you are aware of the letter of
17· · intent for 200,000 shares?
18· · · · A.· No.· I'm saying this complaint was
19· · done months after the date that you just
20· · showed me that letter of intent.
21· · · · Q.· And you said you hadn't seen the
22· · letter of intent.· I'm asking you now if that
23· · refreshes your recollection.
24· · · · A.· I don't recall seeing it.· I don't
25· · recall.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· You have to let me finish.
·3· · · · A.· Okay.
·4· · · · Q.· Okay.· Withdrawn.
·5· · · · · · Is it true that the Chehabars wanted
·6· · to sell Wantickets?
·8· · · · Q.· And do you know who made the
·9· · decision not to go forward with the
10· · Eventbrite deal?
11· · · · A.· Probably the whole family, to the
13· · · · Q.· Were you part of that decision?
14· · · · A.· I mean, we had conversations about
15· · it.
16· · · · Q.· About what?
17· · · · A.· About me acquiring Wantickets. I
18· · had nothing to do with -- no.
19· · · · Q.· I asked if you participated in the
20· · decision not to sell Wantickets to
21· · Eventbrite.
22· · · · A.· No.
23· · · · Q.· Was Rob honest with you in the
24· · Majesco deal?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·form.
·3· · · · A.· He actually hurt my relationship
·4· · with the family of Majesco.· They ended up
·5· · suing him or he sued them.· I don't remember
·6· · exactly what happened.· But they ended up in
·7· · litigation.· And from the best of my
·8· · knowledge, he didn't do right by them with
·9· · their business.
10· · · · Q.· And did you know that at the time of
11· · the Majesco deal or soon thereafter?
12· · · · A.· I heard later.
13· · · · Q.· When did you hear that?
15· · · · Q.· Was it before 2015?
16· · · · A.· Yes.· But we can take a look at
17· · the -- no, it wasn't before.· I don't think
18· · it was before.· But we can take a look.· You
19· · can look at when they sued him or he sued
20· · them or whenever it all happened, it's
21· · public.
22· · · · Q.· You knew about it at the time of the
23· · lawsuit?
24· · · · A.· No.
25· · · · Q.· But when did you learn about it?
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·1· · · · · · · · · ·Joseph Schnaier
·3· · · · Q.· Did you know about it before you
·4· · invested in LiveXLive Media or Loton?· When I
·5· · say LiveXLive, I include Loton, just so we're
·6· · clear.
·7· · · · · · Did you know about the lawsuit
·8· · against Rob concerning the Majesco deal when
·9· · you invested in LiveXLive Media?
10· · · · A.· I don't recall.· But I don't think
11· · so.
12· · · · Q.· How did you learn about it?
13· · · · A.· From one of the members of the
14· · family.
15· · · · Q.· Who is that?
16· · · · A.· I think it was Morris's son or
17· · Jesse's son.
18· · · · Q.· Were you aware at the time of the
19· · Majesco deal that Rob was doing things that
20· · families of the Majesco deal might find
21· · inappropriate?
22· · · · A.· I don't remember the conversation,
23· · but they were extremely unhappy with him and
24· · referred to him in not great terms.
25· · · · Q.· And did you know this at or around
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·1· · · · · · · · · ·Joseph Schnaier
·2· · the time of the Majesco deal?
·3· · · · A.· No.· Their problems happened after
·4· · the Majesco deal.
·5· · · · Q.· What was their problem -- when did
·6· · their problems happen?
·7· · · · A.· I don't know.· I don't recall.
·8· · · · Q.· And when did you first hear that
·9· · there was problems between Rob and this
10· · family concerning the Majesco deal?
11· · · · A.· I don't recall, but you can look at
12· · the lawsuit.
13· · · · Q.· But you just told me you didn't know
14· · about it when the lawsuit was filed.· So how
15· · would looking at the lawsuit help me?
16· · · · A.· Because it would tell you when the
17· · date they had a problem was.
18· · · · Q.· I want to know the date you learned
19· · that they had a problem.
20· · · · A.· I don't recall, I told you that.
21· · · · Q.· And that's the only deal you had
22· · done with Rob before the Wantickets LiveXLive
23· · deal, correct?
25· · · · Q.· Okay.· And how well did you and Rob
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · get to know each other -- withdrawn.
·3· · · · · · Between the Majesco deal and the
·4· · beginning of your conversations concerning
·5· · Wantickets, how often did you and Rob
·6· · communicate?
·7· · · · A.· Could you repeat that, please?
·8· · · · Q.· Between the Majesco deal and the
·9· · first time you and Rob started communicating
10· · about a deal between Wantickets and
11· · LiveXLive, how often did you and Rob
12· · communicate?
14· · · · Q.· Was it more than once a month?
15· · · · A.· I doubt it.
16· · · · Q.· Was it more than once a year?
18· · · · Q.· Well, I understand.· I'm trying to
19· · narrow down the possibility.
20· · · · · · Did you speak to him -- let's do it
21· · a different way.· Between the Majesco deal
22· · and the first time you discussed Wantickets
23· · to LiveXLive with Rob, had you spoken to him
24· · five times or communicated with him five
25· · times?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I really don't remember.· I wouldn't
·3· · be -- I don't want to speculate.
·4· · · · Q.· Well, we can do it this way.
·5· · · · · · Did you communicate with him a
·6· · million times between that period?
·7· · · · A.· You have my answer.
·8· · · · Q.· No, I don't.· Did you communicate
·9· · with Rob a million times between the Majesco
10· · deal and the first time you discussed
11· · Wantickets and LiveXLive?
12· · · · A.· No.· We didn't communicate a million
13· · times.
14· · · · Q.· 500,000?
15· · · · A.· No, we didn't communicate 500,000
16· · times.
17· · · · Q.· 1,000?
18· · · · A.· I don't know.· No.
19· · · · Q.· 100?
20· · · · A.· I told you, I don't recall.
21· · · · Q.· It could have been 100?
22· · · · A.· I don't recall, but I doubt it.
23· · · · Q.· 50?
24· · · · A.· You know what, he would call -- he
25· · would call, now that I think of it, here and
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·1· · · · · · · · · ·Joseph Schnaier
·2· · there.· Because I had -- I was a stockbroker
·3· · then, he would tell me to buy shares in his
·4· · company, you know, here and there.· But
·5· · that's it.· It wasn't anything substantial.
·6· · · · Q.· Okay.· When was the first time you
·7· · and Rob discussed LiveXLive or Loton?
·8· · · · A.· Around the time I first got involved
·9· · with Wantickets.
10· · · · Q.· And how did that come about?
11· · · · A.· I told you, I was in Los Angeles and
12· · we ran into each other.
13· · · · Q.· And what did you discuss about
14· · LiveXLive or Loton?
16· · · · Q.· You don't recall.· So in paragraph
17· · 39 in the complaint, you write, At the time,
18· · Ellin's company, Loton which was a shell and
19· · later became LiveXLive Media, had an interest
20· · in a London nightclub called Kokos, and Ellin
21· · proposed that Mr. Schnaier invest in Loton.
22· · · · · · So you remembered when you filed
23· · your complaint what you had discussed, but in
24· · between the filing of the amended complaint
25· · and this deposition, you had forgotten. I
U.S. LEGAL SUPPORT

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·1· · · · · · · · · ·Joseph Schnaier
·2· · just want to make sure I understand your
·3· · testimony.
·4· · · · A.· No.· You're asking me what -- when
·5· · we ran into each other what we spoke about
·6· · and I don't remember.
·7· · · · Q.· You said, I don't remember.
·8· · · · A.· Correct.
·9· · · · Q.· Okay.· But in your complaint, your
10· · amended complaint --
11· · · · A.· Are we still on tab 38?
12· · · · Q.· No.· I'm reading you your amended
13· · complaint.· You said you don't remember what
14· · you and Rob discussed.
15· · · · A.· Well, you want me to go to the
16· · amended complaint?
17· · · · Q.· If you would like to.· I just read
18· · it to you.· If you don't trust me for what
19· · I've read to you, feel free to.· The amended
20· · complaint is tab 2, it's Exhibit 6.
21· · · · A.· If that's what's in there then
22· · that's what we spoke about.
23· · · · Q.· And I'm asking you, I just want to
24· · be clear.· You had forgotten between the
25· · amended complaint being filed and today you
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·1· · · · · · · · · ·Joseph Schnaier
·2· · forgot what you and Rob discussed, but you
·3· · knew what you discussed when you filed the
·4· · amended complaint.· I just want to make sure
·5· · I understand your testimony correct.
·7· · · · ·form.
·8· · · · A.· Do you mind if I take a look at the
·9· · amended complaint?
10· · · · Q.· I said I had no problem with you
11· · doing that.
12· · · · A.· What tab is it?
13· · · · Q.· Tab 2.
14· · · · A.· And where am I looking?
15· · · · Q.· Paragraph 39.
16· · · · A.· Paragraph 39?
17· · · · Q.· It's got a page number.· Look, it
18· · starts at 38 and then it goes, what I read to
19· · you is 39.
20· · · · A.· Okay.· 39.· Hold on.
21· · · · · · · ·(Witness peruses document.)
22· · · · A.· Okay.· Well, you asked me when I ran
23· · into Rob, the first time when I ran into him
24· · in Los Angeles.· This doesn't say that this
25· · was the first conversation I had when I ran
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·1· · · · · · · · · ·Joseph Schnaier
·2· · into him in L.A.· So what you're saying and
·3· · what my answer was, you're trying to portray
·4· · something that's not correct.
·5· · · · Q.· Well, paragraph 38 says, In 2014
·6· · shortly after Mr. Schnaier became involved in
·7· · Wantickets, which is what you said, Mr. Ellin
·8· · who knew Mr. Schnaier from an unrelated deal
·9· · approached Mr. Schnaier to discuss doing a
10· · deal with him.
11· · · · A.· Yes.· That was shortly after we met,
12· · we ran into each other.
13· · · · Q.· So that's not the first time you
14· · discussed LiveXLive or Loton with Rob Ellin,
15· · what was -- that was my question.
16· · · · A.· My answer was, I don't recall the
17· · first time.· That's why you confused me.
18· · · · Q.· I see.· Now, turning to tab 2 of the
19· · complaint -- I'm sorry, not tab 2 -- look at
20· · paragraph 26 of the complaint.
21· · · · · · You allege that in 1991, the NASD
22· · found he, Ellin, guilty of making
23· · unauthorized securities transactions on
24· · behalf of a customer and fined him over
25· · $27,000.· And you refer to Exhibit B, which
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·1· · · · · · · · · ·Joseph Schnaier
·2· · is, I believe, a FINRA report.· Paragraph 26
·3· · of the amended complaint.
·4· · · · A.· Paragraph 26?
·5· · · · Q.· Yes.
·6· · · · A.· Okay, I see it.
·7· · · · Q.· When did you learn that Mr. Ellin
·8· · was found guilty of making unauthorized
·9· · security trades?
10· · · · A.· I don't recall the exact time.
11· · · · Q.· Well, how did you learn this?
12· · · · A.· I don't recall exactly.
13· · · · Q.· Well, you refer to Exhibit B to the
14· · complaint, which if you scroll down to
15· · Exhibit B --
16· · · · A.· Where?
17· · · · Q.· You've got to scroll down.· It's
18· · Exhibit B to the complaint.· I will tell you
19· · the page number as soon as I get there.· It's
20· · page 97.
21· · · · · · This comes from broker check report
22· · from FINRA.· When did you obtain this broker
23· · check report?
24· · · · A.· I don't see it.
25· · · · Q.· Go to page 97.· PDF page 97.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Oh.· Page 97.· For some reason it's
·3· · not loading.
·4· · · · Q.· All right.
·5· · · · A.· It's okay, I'll find it.
·6· · · · Q.· I'll represent to you --
·7· · · · A.· Don't worry.
·8· · · · Q.· I'm worried because it seems to be
·9· · taking you a long time to find it.
10· · · · A.· Just a minute.· Let's not get out of
11· · hand.
12· · · · Q.· I'm not out of hand.· I'm telling
13· · you I'll base my question to you on a
14· · representation to you.
15· · · · A.· Don't worry.
16· · · · Q.· No one is worried.
17· · · · A.· Don't worry, don't worry.
18· · · · Q.· No one is worried.
19· · · · A.· Okay.· Ask your question.· It's not
20· · loading for some reason.
21· · · · Q.· When did you obtain the FINRA report
22· · which is a broker check report for Rob Ellin?
23· · · · A.· When did I obtain it?
24· · · · Q.· Yes.
25· · · · A.· I don't recall the exact date, I
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·1· · · · · · · · · ·Joseph Schnaier
·2· · don't recall.
·3· · · · Q.· All these allegations that you
·4· · discussed, NASD violations in 26 and 27 of
·5· · the complaint, did you discover these before
·6· · you signed the asset purchase agreement?
·8· · · · Q.· So you might have known of the
·9· · securities violations that Mr. Ellin -- that
10· · are contained in Exhibit B and alleged in the
11· · complaint, before you signed the asset
12· · purchase agreement?
13· · · · A.· I don't want to give you the wrong
14· · answer.· I don't recall, I really don't
15· · remember the date.
16· · · · Q.· Do you know if you knew of these
17· · securities violations and the report before
18· · you invested 1.25 million in LiveXLive?
20· · · · ·form.
21· · · · A.· I don't remember.
22· · · · Q.· Do you know how to obtain a FINRA
23· · report, a broker check report from FINRA?
24· · · · A.· Yes.
25· · · · Q.· How long have you known how to
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·1· · · · · · · · · ·Joseph Schnaier
·2· · obtain a broker check report from FINRA?
·3· · · · A.· Many years.
·4· · · · Q.· Have you known since 2015 how to do
·5· · this?
·6· · · · A.· Sure.
·7· · · · Q.· Okay.· Do you know if you obtained a
·8· · FINRA broker check report for Rob when you
·9· · first started discussing doing the deal with
10· · him for Wantickets and LiveXLive?
11· · · · A.· I really don't remember when I
12· · looked into it or what caused me to look into
13· · it.
14· · · · Q.· Now, in paragraph 29 of the
15· · complaint, you allege that Rob was arrested
16· · for alcohol-related vehicle offense.
17· · · · · · When did you learn of this?
18· · · · A.· Sometime after -- sometime after our
19· · deal was done and he defrauded me and before
20· · we filed this complaint.
21· · · · Q.· So how did you learn of these DUI,
22· · or vehicle related offenses?
24· · · · · · · ·MR. WURTZEL:· I'm going to
25· · · · ·instruct the witness, to the extent
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·that you came to learn of -- to the
·3· · · · ·extent that you came to learn of it
·4· · · · ·through information you were provided
·5· · · · ·by counsel, you should exclude that
·6· · · · ·information from your answer and say
·7· · · · ·that, I can't answer without
·8· · · · ·divulging attorney-client
·9· · · · ·communication.
10· · · · · · · ·If you came to learn of it
11· · · · ·through some source other than
12· · · · ·counsel, then you should answer that.
13· · · · Q.· Okay.
14· · · · A.· I believe -- yeah, I don't think I
15· · can answer that for client-counsel privilege.
16· · · · Q.· Did you have counsel when you
17· · negotiated the asset purchase agreement to
18· · sell Wantickets to LiveXLive media?
19· · · · A.· Yes, I did.
20· · · · Q.· So now, in the steps you took to
21· · evaluate management and its honesty before
22· · doing any deal, any investment or deal with
23· · LiveXLive, you don't remember if you obtained
24· · the FINRA report, and you don't remember if
25· · you were aware of these -- and you were not
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·1· · · · · · · · · ·Joseph Schnaier
·2· · aware of these DUI allegations.· Is that
·3· · correct?· I just want to be clear.
·4· · · · A.· The DUI I wasn't aware of until
·5· · after the APA.· The FINRA report, I don't
·6· · recall when I learned about it.· That's it.
·7· · · · Q.· All right.· Let's go to Exhibit A,
·8· · the amended article.· It's an article seeking
·9· · alpha article.· Right after the complaint
10· · itself.
11· · · · A.· All the way down?
12· · · · Q.· It's page 54 of the PDF.· I don't
13· · know that you have the PDF.· So it starts at
14· · 55, the exhibit tab is 54.
15· · · · A.· 54?
16· · · · Q.· Yes.
17· · · · A.· So it's the first amended -- tab 2,
18· · correct?
19· · · · Q.· Correct.
20· · · · A.· And page 54?
21· · · · Q.· Of the PDF, correct.· It says
22· · Exhibit A, and then the article starts on 55.
23· · · · A.· Sorry, I'm scrolling down.
24· · · · Q.· If you need to take several minutes
25· · to locate pages -- are you having a
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·1· · · · · · · · · ·Joseph Schnaier
·2· · technological problem on your end, Mr.
·3· · Schnaier?
·4· · · · A.· A little bit.
·5· · · · Q.· What's the problem?
·6· · · · A.· It keeps -- okay, we're almost
·7· · there.· You're very aggressive, you know.
·8· · · · Q.· I do not --
·9· · · · A.· I think you're a nice man, but
10· · you're very aggressive.
11· · · · Q.· I don't understand why you'd say
12· · that.· I merely asked you if you're having
13· · technological problems.
14· · · · A.· Okay, we got it.
15· · · · Q.· And it's taking you several minutes
16· · to find a tab.
17· · · · A.· We're here.· Let's treat each other
18· · with respect.
19· · · · Q.· I've been treating you with respect
20· · the entire time, Mr. Schnaier.
21· · · · · · · ·MR. WURTZEL:· Let's continue.
22· · · · ·Okay.· You found the document?
23· · · · · · · ·THE WITNESS:· Yes.
24· · · · · · · ·MR. WURTZEL:· Next question.
25· · · · Q.· Okay.· When did you first see the
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·1· · · · · · · · · ·Joseph Schnaier
·2· · article -- withdrawn.
·3· · · · · · The article is dated September 2,
·4· · 2015.· When did you first become aware of
·5· · this article?
·7· · · · Q.· How did you become aware of this?
·8· · · · A.· I don't recall.· I'm assuming
·9· · someone sent it to me.
10· · · · Q.· Do you know, was it before or after
11· · you invested in LiveXLive Media?
12· · · · A.· Wow, this is a bad article.· It was
13· · after.
14· · · · Q.· Oh, in your due diligence of the
15· · management team of LiveXLive Media and Rob
16· · Ellin's bio, you didn't turn up this article,
17· · I take it?
18· · · · A.· I don't believe I did.· Because this
19· · is a really bad article.· It's stock
20· · manipulation.
21· · · · Q.· The question is, did you, yes or no?
22· · · · A.· I don't believe I did.· Because it
23· · says here that Rob was involved in stock
24· · manipulation.· And if that's the case, that's
25· · bad.· I wouldn't have gotten involved in it.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· So how did you manage to locate this
·3· · article subsequently?
·5· · · · Q.· Did you do any searches of Rob Ellin
·6· · before the deal, any internet searches of Rob
·7· · Ellin before the deal to see if -- withdrawn.
·8· · · · · · All of these allegations we've been
·9· · discussing, the DUI, the FINRA report, this
10· · article, why weren't these -- why didn't you
11· · uncover these before you did the deal with
12· · Rob Ellin but were able to uncover them
13· · afterwards?
15· · · · ·form.
17· · · · A.· I'm not sure.
18· · · · Q.· Did you ever confer with SEC lawyers
19· · concerning Rob or LiveXLive?
20· · · · A.· I'm not understanding that question.
21· · · · Q.· Did you ever speak to SEC,
22· · Securities and Exchange Commission's lawyers
23· · about Rob Ellin or LiveXLive?
24· · · · A.· I don't recall speaking to any SEC
25· · lawyers.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· All right.· Let's go to tab 18.
·5· · · · ·e-mail chain as Defendants' Exhibit
·6· · · · ·17 for identification.)
·8· · · · Q.· This is an e-mail.· The top one is
·9· · an e-mail from Robert Ellin to Bo Dietl,
10· · dated April 10, 2018.· You see Bo Dietl
11· · writes, Rob, I just learned that Joe filed a
12· · lawsuit against you weeks ago in New York.
13· · This is going to get ugly.· Also, Joe is
14· · conferring with SEC lawyers re his free
15· · trading stock being taken away.
16· · · · · · Did you tell Bo Dietl you were
17· · conferring with SEC lawyers?
18· · · · A.· Possible.· But I think Josh -- he
19· · probably meant Josh at Schlam Stone were SEC
20· · attorneys.
21· · · · Q.· Did you or your attorneys confer
22· · with the SEC?
23· · · · A.· I don't think he was meaning -- I
24· · don't know what Bo was talking about.· But
25· · I'm assuming he meant Schlam Stone & Dolan as
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·1· · · · · · · · · ·Joseph Schnaier
·2· · SEC attorneys, I'm assuming, I don't know. I
·3· · don't know what he meant.
·4· · · · Q.· So as far as you know, neither you
·5· · nor your attorneys ever communicated with SEC
·6· · concerning Rob or LiveXLive media?
·7· · · · A.· It's possible.· I haven't spoken to
·8· · any SEC attorney.
·9· · · · Q.· All right.· Let's just pull up tab
10· · 19.
13· · · · ·asset purchase agreement as
17· · · · Q.· This is the asset purchase
18· · agreement.
19· · · · · · Do you recognize this document?
20· · · · A.· One second.
22· · · · A.· Okay.
23· · · · Q.· All right.· Do you recognize it?
24· · · · A.· Yes.
25· · · · Q.· And this is a document by which you
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·1· · · · · · · · · ·Joseph Schnaier
·2· · and others sold all of Wantickets's assets to
·3· · LiveXLive, correct?
·5· · · · Q.· And you signed this document,
·6· · correct?
·7· · · · A.· Correct.
·8· · · · Q.· On behalf of yourself and Danco.
·9· · Let's also pull up tab 20, which is two
10· · subscription agreements.· Loton reports
11· · subscription agreement.· And there's two
12· · subscription agreements.
15· · · · ·Loton Corp. subscription agreement as
19· · · · Q.· Do you recognize these documents?
20· · · · A.· Loton Corp. subscription agreements.
21· · Looks familiar.
22· · · · Q.· Well, are those your signatures for,
23· · I think, it's Wantickets or Danco?
24· · · · A.· Yes.
25· · · · Q.· This is now pursuant to these two
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·1· · · · · · · · · ·Joseph Schnaier
·2· · agreements, you received 250,000 shares and
·3· · 125,000 warrants in LiveXLive known as Loton
·4· · at the time, correct?
·5· · · · A.· That's what it says, yes.
·6· · · · Q.· And you paid 1.25 million for this,
·7· · correct, regarding these agreements?
·8· · · · A.· Yes.
·9· · · · Q.· And did you exercise the warrants?
11· · · · Q.· And they were a penny a warrant,
12· · correct?
14· · · · Q.· So in exchange for -- in exchange
15· · for $1.25 million you received 375 shares of
16· · LiveXLive or Loton at the time, correct?
18· · · · Q.· And so really, you paid $3.33 a
19· · share?
20· · · · · · · ·MR. WURTZEL:· Objection to the
21· · · · ·characterization and form.
22· · · · Q.· Is that correct?
23· · · · A.· No.· I paid $5 a share.
24· · · · Q.· Well, but you paid 1.25 million, and
25· · you received 375,000 shares after you
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·1· · · · · · · · · ·Joseph Schnaier
·2· · exercised the warrants for a penny a warrant.
·3· · So whatever that is -- so for the 1.25
·4· · million, you wound up with the 375,000
·5· · shares, which do the math is $3.33 a share.
·6· · What part do you disagree with?
·7· · · · A.· The stock was trading at $5 a share.
·8· · Yes, I got warrants at one penny a share.· So
·9· · I paid $5 a share, but if you factor in my
10· · warrants, my cost basis is in the 3s.
11· · · · Q.· Well, first of all, where in this
12· · agreement does it say you're paying $5 a
13· · share?· Okay, I see what you're saying.
14· · You're right.· Your cost basis is $3.33 a
15· · share, right.· At $3.33 a share you received
16· · 375,000 shares; is that accurate?
18· · · · ·form.
19· · · · Q.· All right.· Withdrawn.
20· · · · · · Did you purchase another 75,000
21· · shares in the fall of 2016?
23· · don't recall.· I don't -- I'm trying to think
24· · of what it was, but I don't recall.
25· · · · Q.· All right.· Well, we'll get to that.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · After your investment in September
·3· · 2016, did LiveXLive pay two for one for a
·4· · forward split?
·5· · · · A.· My investment in 2016?
·6· · · · Q.· Right.· The subscription agreements
·7· · and what I just mentioned in the fall of
·8· · 2016.· After those investments were made, did
·9· · Wantickets do a two-for-one split?· Not
10· · Wantickets, LiveXLive.· I'm sorry.
11· · · · A.· I don't recall the exact date.
12· · · · Q.· Well, did they do a two-for-one
13· · split after you acquired your shares?
14· · · · A.· I don't remember.· But I'll tell you
15· · this, I'm looking at it now, and --
16· · · · Q.· You don't remember.· You've answered
17· · my question.
19· · · · Q.· Now, look at section 2(f) on the
20· · subscription agreement.· You represent that
21· · the undersigned, which is your company, are
22· · there any other officers or directors of
23· · WantMCS?
24· · · · A.· No.
25· · · · Q.· So in Section 2(f), you warrant to
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·1· · · · · · · · · ·Joseph Schnaier
·2· · LiveXLive that the company acquiring the
·3· · securities which you're the sole officer of
·4· · is an accredited investor, correct?
·6· · · · Q.· And is that accurate?
·7· · · · A.· Yes.
·8· · · · Q.· And how many investments had you or
·9· · the company made before this?
10· · · · A.· I believe this was specifically for
11· · anything that had related to Wantickets or
12· · LiveXLive.
13· · · · Q.· No.· But let's look at Exhibit B to
14· · the subscription agreement.
15· · · · A.· Exhibit what?
16· · · · Q.· B to the subscription agreement.
17· · · · A.· B?
18· · · · Q.· Yes.
19· · · · A.· Okay.
20· · · · Q.· Now, you see this is the definition
21· · of an accredited investor.· And it says, Any
22· · person falling within one or more of the
23· · following categories.
24· · · · · · So which category does it fall into?
25· · · · A.· I can't read this.· It's all blur.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · It's a blurred document.
·3· · · · Q.· Exhibit B on the bottom, scroll
·4· · down.
·5· · · · A.· Even number B is blurred.· I mean,
·6· · yeah, it's too blurred.
·7· · · · Q.· It's a blurred page before that, but
·8· · that's not Exhibit B.
·9· · · · A.· Oh, what are you saying to me?
10· · · · Q.· Look at Exhibit B to the
11· · subscription agreement, Mr. Schnaier.
12· · · · A.· Oh, okay.· Exhibit B.
13· · · · Q.· Does Exhibit B --
14· · · · A.· I got it, I got it.
15· · · · Q.· You understand that -- we've had
16· · problems with tabs --
17· · · · A.· I got it.
18· · · · Q.· Before you answer my question, I
19· · have another question.
20· · · · · · Do you understand that exhibits are
21· · documents generally that follow the main
22· · document?· Do you understand that concept of
23· · what an exhibit is?
25· · · · ·form.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Yes.
·3· · · · Q.· Okay.· So now we were having
·4· · problems, it seems, with the exhibits.· So I
·5· · want to make sure Mr. Schnaier understands
·6· · what an exhibit is.· Maybe I presumed he had
·7· · knowledge he did not.
·8· · · · A.· You're speaking a little bit fast.
·9· · · · Q.· In the definition, it says, The
10· · undersigned was brought by an accredited
11· · investor and this is the definition of an
12· · accredited investor, and a person falling
13· · within one or more of the following
14· · categories.· So I'm asking which category
15· · WantMCS fell into for you to warrant them an
16· · accredited investor?
17· · · · A.· Is this a multiple choice?· Are you
18· · asking me to answer this now?
19· · · · Q.· Well, you warranted.· You signed
20· · this subscription agreement.
21· · · · A.· I didn't -- okay, let me see. I
22· · don't recall when I did this years ago.
23· · · · · · · ·MR. WURTZEL:· Objection to the
24· · · · ·form.
25· · · · A.· Which one did I check off?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· I really don't know, Mr. Schnaier.
·3· · But you know what, withdrawn.
·4· · · · · · At page -- look at section 2 (g)(ii)
·5· · on page 3 of the subscription agreement, not
·6· · the exhibit.
·7· · · · A.· 2 (g)(ii).
·8· · · · Q.· 2 (g), Roman numeral 2.
·9· · · · A.· Okay.
10· · · · Q.· Do you see, can you read that?
12· · · · A.· It's blurry.
13· · · · Q.· I'll read it to you.· The
14· · undersigned has the financial ability to bear
15· · the economic risk of his or her investment as
16· · adequate means for providing for his or her
17· · current needs and personal contingencies and
18· · has no need for liquidity with respect to his
19· · or her investment in the company.
20· · · · · · Was that accurate when you signed
21· · this agreement concerning WantMCS?
22· · · · A.· I don't recall that.· I don't think
23· · that that has anything to do with the
24· · investment that WantMCS did.
25· · · · Q.· I'm asking you if that is a true
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·1· · · · · · · · · ·Joseph Schnaier
·2· · statement concerning WantMCS.
·3· · · · A.· Can you read it again, please?· I'm
·4· · trying to read it.· It's very blurry.
·5· · · · Q.· Before we get to that, the
·6· · undersigned hereby referenced in warrants to
·7· · the company and its affiliates as follows:
·8· · And this is part of those representations to
·9· · warrant these, is that the undersigned,
10· · meaning the entity or person who signed this
11· · agreement, has the financial ability to bear
12· · the economic risk of his or her investment,
13· · has adequate means for providing for his or
14· · her current needs, and personal
15· · contingencies, and has no need for liquidity
16· · with respect to his or her investment in the
17· · company.
18· · · · · · Is that accurate at the time you
19· · signed the subscription agreement?
21· · was accurate.· But I don't -- you know, fraud
22· · is a whole other story.
23· · · · Q.· Who's talking about fraud?
24· · · · A.· Well, I got defrauded.
25· · · · Q.· That's fine, Mr. Schnaier, but we're
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·1· · · · · · · · · ·Joseph Schnaier
·2· · saying when you made this investment, you
·3· · represented to the company you could bear the
·4· · economic risk, correct?
·5· · · · A.· Yes, but I didn't think he was going
·6· · to defraud me.
·7· · · · Q.· How often had your company invested
·8· · directly or indirectly as an accredited
·9· · investor before the subscription agreement?
10· · · · A.· I'm not understanding that question.
11· · · · Q.· Well, you stated -- you're an
12· · accredited investor, according to your
13· · representations in this agreement.· So how
14· · many times before entering into the
15· · subscription agreement had you or a company
16· · which you had an ownership interest in
17· · invested in a company as an accredited
18· · investor?
19· · · · A.· A few times.
20· · · · Q.· Could you define a few and tell me
21· · some of the companies?
22· · · · A.· QV Technology, Seat Software.· There
23· · was a water company we invested in, I forgot
24· · the name.· If you want to throw Majesco in
25· · there, you can name Majesco.· And there was
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·1· · · · · · · · · ·Joseph Schnaier
·2· · some IPOs we were investing in that we were
·3· · offered over the course of, you know, years
·4· · and years.· I can't remember their names.· So
·5· · I'm sure it was, you know.
·6· · · · Q.· So several times, okay -- withdrawn.
·7· · · · · · How did you decide on the share
·8· · price of $5 a share?
·9· · · · A.· That's where the stock was trading
10· · at that time, I believe.
11· · · · Q.· How do you know that?
12· · · · A.· Because that's when you punched it
13· · up, that's where it was.
14· · · · Q.· So that wasn't based on anything Rob
15· · told you about the company.· That was -- that
16· · $5 a share was based on the market price of
17· · the stock; is that correct?
19· · · · ·form.
20· · · · A.· Well, Rob -- it was based on a
21· · market price, I believe, to the best of my
22· · recollection, and Rob confirmed me by selling
23· · me the shares at that price.· So based on
24· · both the shares -- the value of the shares
25· · were $5 a share.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Do you know what the term due
·3· · diligence means?
·4· · · · A.· I do.
·5· · · · Q.· And how would you define due
·6· · diligence?
·7· · · · A.· Doing research.
·8· · · · Q.· All right.· So did you do any due
·9· · diligence before signing the subscription
10· · agreements to determine the value or the
11· · value of the shares of LiveXLive or Loton as
12· · it was known then?
13· · · · A.· I'm sure I've done -- I did do some
14· · due diligence.· But the fact is it's a public
15· · company and the stock is trading where it's
16· · trading.· And by LiveX and Rob Ellin actually
17· · selling me the shares at that price, I
18· · wouldn't think that they're trying to cheat
19· · me.· I mean, it is what it is.· They're a
20· · public company.· So I was comfortable with
21· · that price because that's where the market
22· · price was.
23· · · · Q.· And what do you think the shares
24· · were worth at this time, knowing everything
25· · you know now?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Well, afterwards, knowing everything
·3· · I know now, prior to our acquisition,
·4· · LiveXLive was just a shell company with just
·5· · a lot of promises and stories that he gave
·6· · me.· And I don't -- and I mean, you could
·7· · look at the facts.· It was worth maybe 20
·8· · percent of what he valued the company, which
·9· · I later found out that he charged other
10· · people much lower prices on the stock, like
11· · it was some sort of flea market.· And I got
12· · charged the highest price, which is, I mean,
13· · borderline thievery.
14· · · · Q.· What do you mean by shell company?
15· · · · A.· He had nothing, no -- nothing, there
16· · was nothing.· There wasn't anything in the
17· · shell, there wasn't a company.
18· · · · Q.· You didn't know this when you signed
19· · the subscription agreement?
20· · · · A.· No.· He made commitments and
21· · promises, you know, told me that they have
22· · certain deals and so on and so forth I can go
23· · through for you.
24· · · · Q.· We will get to that, but at the time
25· · you signed the subscription agreement, did
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·1· · · · · · · · · ·Joseph Schnaier
·2· · you know that LiveXLive was, as you say, a
·3· · shell company?
·4· · · · A.· At that time, I believed that he had
·5· · an IPO he was working on for 100 million.
·6· · · · Q.· Mr. Schnaier, I'm not asking you
·7· · what you -- I'm cutting you off because I
·8· · want you to listen to my question.
·9· · · · · · At the time you signed the
10· · subscription agreement, did you know that
11· · LiveXLive was a shell company?· That's all
12· · I'm asking.
13· · · · A.· I mean, I don't -- I'm not sure what
14· · I -- how I thought about it, but he did tell
15· · me --
16· · · · Q.· I'm not asking you what he told you.
17· · All I'm asking you is, did you know what
18· · assets or what revenues LiveXLive had or
19· · didn't have when you signed the subscription
20· · agreement?· It's a yes or no question.
21· · · · A.· He was telling me that they were
22· · buying -- they were acquiring certain assets,
23· · which made me believe that there were very
24· · valuable assets in the company and this thing
25· · was going to be some kind of a really good
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·1· · · · · · · · · ·Joseph Schnaier
·2· · deal.
·3· · · · Q.· I understand.· I'm going to cut you
·4· · off again.· I'm not asking you what he told
·5· · you.
·6· · · · · · You're alleging that when you signed
·7· · the subscription agreement, at that moment
·8· · LiveXLive was a shell company, correct?
·9· · · · A.· I'm alleging?
10· · · · Q.· You're saying now.· Your testimony
11· · is when you signed that subscription
12· · agreement, LiveXLive was a shell company?
13· · · · A.· Well, I mean, take a look at what
14· · happened afterwards.
15· · · · Q.· I'm asking you if that's what you're
16· · saying?
17· · · · A.· The company went from $500
18· · million --
19· · · · Q.· I'm asking you if at the time you
20· · signed the subscription agreement was
21· · LiveXLive a shell company?
23· · · · ·form.
24· · · · A.· I don't recall.· I don't know what
25· · you're saying and I don't recall.· You're not
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·1· · · · · · · · · ·Joseph Schnaier
·2· · letting me speak, so I don't know what you're
·3· · saying.
·4· · · · Q.· Because you're not answering my
·5· · question.
·6· · · · A.· I'm trying my best to answer your
·7· · questions, but you keep cutting me off.
·8· · · · Q.· Because you're not answering them.
·9· · · · A.· I'll get to it if you allow me to
10· · get to it.
11· · · · Q.· I want you to -- you testified
12· · LiveXLive was a shell company.· Was it a
13· · shell company when you signed the
14· · subscription agreement?
15· · · · A.· I believe there was assets that he
16· · was acquiring into it and it wasn't just a
17· · shell company.· There were some very large
18· · assets, you know, anywhere between, you know,
19· · very big numbers, with some very, very
20· · serious people that were going to be involved
21· · in it with some very big investors that were
22· · coming in with big names.· And I thought that
23· · this was going to be something really serious
24· · or else I wouldn't have made that investment.
25· · · · · · So, obviously, I mean, I thought I'm
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·1· · · · · · · · · ·Joseph Schnaier
·2· · going to make a significant investment in a
·3· · company like that.· I was going to believe
·4· · what he's telling me, that he has all these
·5· · big acquisitions and major investors coming
·6· · in.· And that's the reason I got involved.
·7· · But at the end of the day, none of it
·8· · happened.· And it ended up that my company,
·9· · Wantickets, was the only asset that they
10· · really had.· And it was very disheartening
11· · and to prove it is Bank of Montreal didn't
12· · put in the hundred million.· I didn't see any
13· · of the big investors he named, including Gary
14· · Winick put in the money.
15· · · · · · I didn't see Bass family put in the
16· · money that he promised.· As a matter of fact,
17· · Gary Winick stated in a deposition that he
18· · wasn't -- that he had no interest.· There was
19· · never any deal with him very serious.
20· · · · · · So all this stuff, if you put all
21· · this together, of course I'm going to invest
22· · in the company.· You got a billionaire
23· · putting money, you got all these major
24· · acquisitions coming into the company, why
25· · wouldn't I want to?· Anyone would want to put
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·1· · · · · · · · · ·Joseph Schnaier
·2· · money into a deal like that.· You have $100
·3· · million IPO coming in.
·4· · · · Q.· You are beyond my question.· But you
·5· · said it was a significant investment so what
·6· · steps, if any, did you take to do due
·7· · diligence on all these things you claim Rob
·8· · Ellin told you about the company, other than
·9· · just believing Rob?· Did you look at any SEC
10· · filings to see if anything was true?· Did you
11· · ask for any documents from Rob or LiveXLive
12· · to show the status of things that he said
13· · that were in the process of doing?
14· · · · · · Did you check the website to see if
15· · any deals they claim they were working on
16· · were -- other than relying on Rob Ellin's
17· · word what, if anything, did you do for due
18· · diligence to confirm anything Rob Ellin told
19· · you that you claim to have relied on?
21· · · · ·form.· Compound question.
22· · · · Q.· You could answer.
23· · · · A.· I mean --
24· · · · · · · ·MR. WURTZEL:· If you understand
25· · · · ·the question, you can answer.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I don't really understand the
·3· · question.
·4· · · · Q.· You don't understand the question?
·5· · Did you perform any due diligence on
·6· · LiveXLive or Rob Ellin at any time before --
·7· · withdrawn.
·8· · · · · · Have you or Wantickets performed any
·9· · due diligence concerning Rob Ellin's
10· · statements concerning LiveXLive up until --
11· · before the asset purchase agreement was
12· · signed?
13· · · · · · · ·MR. WURTZEL:· Objection to form
14· · · · ·and to the characterization of due
15· · · · ·diligence to the extent it calls for
16· · · · ·a legal conclusion.
17· · · · Q.· Using your definition of research,
18· · did you do any research to discover the
19· · veracity or lack of veracity of any statement
20· · Rob Ellin made to you before signing the
21· · asset purchase agreement?
22· · · · A.· Well --
24· · · · ·form.
25· · · · Q.· I'd like a yes or no answer.· I'll
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·1· · · · · · · · · ·Joseph Schnaier
·2· · follow up with that.
·3· · · · A.· To the best of my recollection, and
·4· · I'm sure -- to the best of my recollection, I
·5· · did some due diligence on the company, but
·6· · that being said --
·7· · · · Q.· That's your answer --
·8· · · · A.· -- I don't believe that --
·9· · · · Q.· You answered my question.
10· · · · A.· I don't believe that --
11· · · · Q.· You answered my question.· You
12· · answered my question.
13· · · · · · What did that due diligence you did
14· · consist of?
16· · · · Q.· Maybe a couple of Google searches?
18· · · · Q.· Do you remember --
19· · · · A.· Actually, I don't believe, though,
20· · that that is a CEO of a --
21· · · · Q.· Mr. Schnaier, you'll have plenty of
22· · time to testify to things you want to discuss
23· · when your attorney asks you questions.
24· · · · A.· I'm trying to answer your question.
25· · · · Q.· You're not.· My question was, do you
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·1· · · · · · · · · ·Joseph Schnaier
·2· · remember a single act of due diligence you
·3· · did concerning anything Rob Ellin told you
·4· · before the asset purchase agreement was
·5· · signed?
·6· · · · A.· I don't recall, but I'm sure I did
·7· · due diligence.
·8· · · · Q.· Well, you were able to find a lot of
·9· · information after the case to file your
10· · lawsuit and support all these allegations
11· · you're making now.· Why weren't you able to
12· · discover all these things before signing the
13· · asset purchase agreement?
14· · · · A.· Why didn't he disclose all this
15· · stuff to me in the beginning and let me make
16· · a normal decision like a true investor
17· · instead of hiding all this information and
18· · making me look for it after I already got
19· · defrauded?
20· · · · Q.· Got it.
21· · · · · · So it was pretty easy to find after
22· · you claim you got defrauded?
23· · · · A.· It was easy for him to come clean
24· · and tell the truth.
25· · · · Q.· But it was easy for you to find the
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·1· · · · · · · · · ·Joseph Schnaier
·2· · truth when you wanted to look?
·3· · · · · · · ·MR. WURTZEL:· Objection.
·4· · · · A.· It was easy --
·5· · · · · · · ·MR. WURTZEL:· Stop, stop,
·6· · · · ·objection to form.
·7· · · · Q.· You could answer my question.· We
·8· · keep going back and forth, but you're an
·9· · accredited investor, correct?
11· · · · ·form.
12· · · · Q.· You've invested in multiple deals,
13· · either yourself or through an entity as an
14· · accredited investor.· And you did -- you
15· · can't even remember any due diligence you
16· · performed before performing a $1.25 million
17· · investment in LiveXLive before selling
18· · Wantickets's assets to LiveXLive Media?
19· · · · A.· Are you really trying to
20· · rationalize --
22· · · · ·form.· Hold on, I'm objecting to the
23· · · · ·form.· Either answer the question or
24· · · · ·say you don't understand.
25· · · · Q.· I'm asking a question, I'm not
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·1· · · · · · · · · ·Joseph Schnaier
·2· · rationalizing anything.· I would like an
·3· · answer to the question.
·4· · · · A.· I don't know the question -- I don't
·5· · understand the question.
·6· · · · Q.· Are you testifying that as an
·7· · accredited investor who is invested in
·8· · numerous -- withdrawn.
·9· · · · · · Are you testifying that as someone
10· · who has made numerous investments, either
11· · through a company you've controlled or
12· · yourself as an accredited investor, that
13· · somebody who has been in the investment
14· · industry for twenty plus years, you can't
15· · remember a single act of due diligence you
16· · took before investing $1.25 million in
17· · LiveXLive or selling Wantickets's assets to
18· · LiveXLive; is that accurate?
19· · · · A.· That's not accurate.
20· · · · Q.· Tell me the single act -- tell me
21· · any act of due diligence you performed.
22· · · · A.· I, obviously, to the best of my
23· · recollection, I would look into the industry.
24· · I would look into the management.· I would
25· · look into some of the companies he referred
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·1· · · · · · · · · ·Joseph Schnaier
·2· · to as he was involved with or acquiring. I
·3· · would look into some of the people he said
·4· · that were involved in the company.· I looked
·5· · at his board of directors.
·6· · · · Q.· What do you mean looked at?
·7· · · · A.· It was on his site, so I took a look
·8· · and then I looked at them, their history,
·9· · which they had a decent history, which I
10· · still don't understand how they let them get
11· · away with all this stuff.· But I -- that's
12· · pretty much the due diligence.
13· · · · Q.· Did you look at LiveXLive SEC
14· · filings?
16· · · · ·form.
17· · · · A.· I don't recall.· But I'm not sure --
18· · I'm not 100 percent.
19· · · · Q.· Did you --
20· · · · A.· I'm not 100 percent sure that at the
21· · time of the investment they were current with
22· · their filing.· I don't recall.· That's the
23· · truth.
24· · · · Q.· Did you ever ask for any
25· · documentation to verify any of the things you
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·1· · · · · · · · · ·Joseph Schnaier
·2· · claim Rob told you?
·3· · · · A.· I don't recall exactly, but I
·4· · believe I must -- I don't know.· I don't
·5· · recall.
·6· · · · Q.· Do you remember Rob or anyone from
·7· · LiveXLive not providing you documents you
·8· · requested?
·9· · · · A.· He would send me documents, but
10· · not -- mostly e-mails of him -- his opinion
11· · or his take on what he wanted me to know and
12· · what he wanted everyone else to know.· So --
13· · · · Q.· Did he ever ask you for documents to
14· · prove that what he was saying was true?
16· · · · ·form.
17· · · · A.· I mean, this is a public company of,
18· · you know, a chairman and CEO of a public
19· · company.· I mean, I would assume he's not
20· · going to lie to me, which, you know, on those
21· · e-mails, and then later finding out that all
22· · those e-mails, a lot of those e-mails were
23· · false and misleading.· I was extremely upset.
24· · · · · · · ·MR. ISSER:· All right.· Let's
25· · · · ·take a half hour break for lunch.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·We'll get back at 2:15.
·3· · · · · · · ·(Whereupon, a brief recess was
·4· · · · ·taken.)
·6· · · · Q.· Mr. Schnaier, have you ever owned a
·7· · brokerage firm in whole or in part, directly
·8· · or indirectly?
·9· · · · A.· No.
10· · · · Q.· No?· Okay.
11· · · · A.· Not to my knowledge.· I mean, I
12· · owned a piece of a branch office.
13· · · · Q.· Branch office that did brokerage
14· · work?
15· · · · A.· Correct.
16· · · · Q.· Were you a broker in that branch
17· · office?
18· · · · A.· Yes, I was.
19· · · · Q.· What was the name of that company?
20· · · · A.· Well, it was a few of them.· It was
21· · Montauk Financial, we had a piece of that
22· · branch.· And then it was Glenn Michael
23· · Financial, and then there was the last one
24· · that you told me about, I forgot the name, it
25· · escapes me.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· All right.· So you've owned three
·3· · brokerage companies or branches of the
·4· · brokerage companies?
·5· · · · A.· Branch offices.
·6· · · · Q.· Were you the sole owner of those
·7· · branch offices?
·8· · · · A.· No.
·9· · · · Q.· What percentage did you own of each?
10· · · · A.· I don't recall.· It's different.
11· · · · Q.· Were you a majority owner of any of
12· · them?
13· · · · A.· No.
14· · · · Q.· All right.· Going back to now to the
15· · amended complaint.· In Exhibit 41 -- sorry,
16· · paragraph 41 -- you say -- you discuss
17· · Ellin's pitches.· Do you see where I'm
18· · looking at in paragraph 41?
19· · · · · · It says, Ellin's pitches, which he
20· · delivered on multiple occasions beginning in
21· · the second half of 2015 in person by phone
22· · and by e-mail to Mr. Schnaier was twofold.
23· · A, Ellin told Mr. Schnaier he had arranged or
24· · was in the process of arranging for LiveXLive
25· · to get the exclusive rights to live stream
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·1· · · · · · · · · ·Joseph Schnaier
·2· · music festivals across the globe, which he
·3· · specifically identified, and Ellin said he
·4· · would be able to make arrangements because of
·5· · his extensive relationships in the industry.
·6· · · · · · What exactly did Mr. Ellin say about
·7· · LiveXLive in the process of arranging to get
·8· · live streaming rights for specific festivals?
·9· · · · A.· Can you repeat that question? I
10· · don't understand what you're asking.
11· · · · Q.· What exactly did Mr. Ellin say to
12· · you in these multiple pitches concerning
13· · LiveXLive being in the process of arranging
14· · for LiveXLive Media to get the exclusive
15· · rights to live stream music festivals across
16· · the globe?· Which festivals did he
17· · specifically identify?
18· · · · A.· That he was getting the streaming
19· · rights to a lot of these major music
20· · festivals; like he said, he landed
21· · Glastenbury, which is a big one, very
22· · prestigious.· Coachella -- a bunch of
23· · ultra -- a bunch of different music
24· · festivals.· And as he got these rights, he
25· · would get our -- he would get us the
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·1· · · · · · · · · ·Joseph Schnaier
·2· · ticketing -- we would do the ticketing
·3· · business for him.
·4· · · · Q.· Now, for these rights when LiveXLive
·5· · got streaming rights, how would they make
·6· · money off them?· How would they make it
·7· · available for viewers to see whatever it is
·8· · they're streaming?
·9· · · · A.· I guess they would put it up on
10· · their platform.
11· · · · Q.· Their website, you mean their
12· · website?
13· · · · A.· Their platform.
14· · · · Q.· What is their platform?
15· · · · A.· The LiveXLive platform, music
16· · platform.
17· · · · Q.· I understand that, but if I'm a
18· · consumer and I want to watch one of the
19· · events they're streaming, how would I go
20· · about that?· How would I go about watching
21· · that event?
22· · · · A.· I guess you would go to their site
23· · and sign up as a subscriber.
24· · · · Q.· And do you think on their site I'd
25· · see what events they have?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I don't know.
·3· · · · Q.· You don't know.· Well, if I went on
·4· · the Wantickets website, would I be able to
·5· · see the events Wantickets was selling tickets
·6· · for?
·7· · · · A.· Oh, we had all our events up on the
·8· · screen.
·9· · · · Q.· Did you ever check LiveXLive's
10· · website to see if they had events up on the
11· · screen?
12· · · · A.· I did.· I did.· And they -- I
13· · didn't -- they had some events up.· It was a
14· · lot of -- when we closed with them and we did
15· · the APA --
16· · · · Q.· I just asked if you ever went to see
17· · their events on the site.· Did you ever go to
18· · their website and see if their events were on
19· · the website.· That's all I'm asking.
20· · · · A.· Yes, I did.
21· · · · Q.· All right.· So do you know then
22· · whether if they had acquired the rights to
23· · live stream events it would be on their
24· · website or not?
25· · · · A.· I wouldn't know because if they
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·1· · · · · · · · · ·Joseph Schnaier
·2· · acquired it, you would have to wait for the
·3· · actual event or they would have to promote it
·4· · somehow.· I wouldn't know.
·5· · · · Q.· Well, before you invested money in
·6· · LiveXLive or signed the asset purchase
·7· · agreement, this is 2015 when he made the
·8· · first of several pitches, so you signed the
·9· · APA two years later.
10· · · · · · So did you ever in between that time
11· · go to LiveXLive Media's website to see if
12· · they were streaming the festivals that
13· · Mr. Ellin told you he was in the process of
14· · arranging?
15· · · · A.· We signed the APA one year later.
16· · · · Q.· No, this is the second half of 2015.
17· · The APA was signed May 5, 2017.
18· · · · A.· I thought you were talking from the
19· · investment side.
20· · · · Q.· Well, either/or.· You tell me.· Did
21· · you ever, between any of these events go to
22· · LiveXLive's website to see if they were
23· · streaming the events that Mr. Ellin told you
24· · they were in the process of arranging?
25· · · · A.· No.· But he sent me an e-mail
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·1· · · · · · · · · ·Joseph Schnaier
·2· · stating he landed Glastenbury, done.· It
·3· · means, if he says it, he says it.· I mean, it
·4· · wouldn't be on the site until the actual
·5· · event happens, so I wouldn't know.
·6· · · · Q.· So when did he tell you he landed
·7· · Glastenbury?
·8· · · · A.· He sent me an e-mail.· It was
·9· · different festivals.· One of them was -- I
10· · was impressed, I don't recall the date.
11· · · · Q.· Well, who cares if it's now or in
12· · 2015.· Let's move.
13· · · · · · Other than accepting Mr. Ellin's
14· · words for Glastenbury, did you take any steps
15· · at all to verify that LiveXLive had obtained
16· · the rights for Glastenbury?
17· · · · A.· It would be very, very difficult for
18· · me to --
19· · · · Q.· Did you ask him to see the contract?
21· · · · Q.· Do you remember him refusing to
22· · provide you the contract?
24· · · · Q.· Did LiveXLive issue a press release
25· · saying that they had rights to Glastenbury?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I don't remember.· No, I don't
·3· · remember seeing one.
·4· · · · Q.· Okay.· Do you know, would they have
·5· · issued a press release if they had gotten
·6· · Glastenbury?
·7· · · · A.· Well, then why would he send me that
·8· · e-mail?
·9· · · · Q.· I'm just asking if they would have
10· · issued a press release if they had gotten
11· · Glastenbury.
12· · · · A.· Maybe he was waiting for the
13· · agreement that he signed, maybe he had a
14· · reason, maybe some sort of strategy in not
15· · releasing it.· But he sent me the e-mail, so
16· · why would he send me the e-mail?
17· · · · Q.· Did Mr. Ellin send you press
18· · releases that were issued by LiveXLive that
19· · were signed in 2015 at the signing of the
20· · purchase agreement?
21· · · · A.· I don't remember, I don't recall.
22· · · · Q.· You're not sure if he sent you
23· · e-mails or press releases about LiveXLive?
25· · · · Q.· How many times did Rob Ellin make
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·1· · · · · · · · · ·Joseph Schnaier
·2· · these pitches before you invested 1.25
·3· · million into LiveXLive?
·5· · · · Q.· You say Mr. Ellin said he was in the
·6· · process of arranging.· What exactly did he
·7· · say?
·8· · · · A.· Process of arranging what?
·9· · · · Q.· In paragraph -- the paragraph we
10· · were just reading.· As part of his pitch, you
11· · said LiveXLive -- that Mr. Ellin told Mr.
12· · Schnaier that he arranged or was in the
13· · process of arranging for LiveXLive Media to
14· · get the exclusive rights to live stream
15· · music.
16· · · · · · What exactly did he say about being
17· · in the process of arranging?
18· · · · A.· I guess arranging our Wantickets
19· · involvement in selling tickets, I'm assuming.
20· · I don't know what you're asking.· I'm not
21· · sure, I'm not clear.
22· · · · Q.· How do you know LiveXLive didn't get
23· · the festivals or events that Mr. Ellin told
24· · you they had gotten or were in the process of
25· · getting?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Because I didn't see or hear that
·3· · they were going up on his -- on the LiveXLive
·4· · stream site.
·5· · · · Q.· Okay.· So you checked the LiveXLive
·6· · stream site?
·7· · · · A.· Later on, yes.· I did check it.· And
·8· · I think I'm on -- I believe I'm on their
·9· · e-mail list, they send me updates.
10· · · · Q.· You also say that Rob told you that
11· · Wantickets would do the ticketing for the
12· · events LiveXLive was streaming.
13· · · · · · Do you know if LiveXLive had the
14· · right to ticket agency for the events it was
15· · streaming?
16· · · · A.· I don't know.· I don't know what his
17· · deal was.
18· · · · Q.· Look at paragraph 44 of the amended
19· · complaint.· The second sentence says, Unknown
20· · to Mr. Schnaier at the time -- and now we're
21· · talking about Ellin's pitches in 2015, I
22· · assume -- but it says, Moreover, Ellin, if
23· · you look at the second paragraph of paragraph
24· · 44, Unknown to Mr. Schnaier at the time,
25· · LiveXLive Media did not have any substantial
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·1· · · · · · · · · ·Joseph Schnaier
·2· · revenue of its own.
·3· · · · · · Did you ever check LiveXLive's SEC
·4· · filings to see if that was true before you
·5· · invested $1.25 million in LiveXLive?
·6· · · · A.· I'm not sure.
·7· · · · Q.· You might not have?
·8· · · · A.· I don't recall if I did or I didn't.
·9· · · · Q.· Well, as an accredited investor
10· · being given information, would you have
11· · looked to see if the company you were
12· · investing $1.25 million or selling your
13· · business to had revenues and assets?
15· · · · Q.· Well, let's look at tab 21.
18· · · · ·QA amended report as Defendants'
21· · · · Q.· This is the two QA amended reports
22· · for Loton Corp. filed on 11/24/2015 with the
23· · Securities and Exchange Commission for the
24· · period ending 9/30/2015.
25· · · · · · Now, if you go down, doesn't this
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·1· · · · · · · · · ·Joseph Schnaier
·2· · list go to financial information -- doesn't
·3· · this list LiveXLive's assets, Loton at the
·4· · time's assets and liabilities?
·5· · · · A.· Yes.· But this was all from Kokos,
·6· · and they were in a lawsuit with Kokos, which
·7· · I also didn't know about.· And I think they
·8· · ended up losing all of that business in a
·9· · lawsuit.· So this revenue is misleading.
10· · · · Q.· Which revenue?
11· · · · A.· Whatever they're showing here.· It's
12· · probably from Kokos, I believe, in 2015.· And
13· · I believe they were in the middle of a
14· · lawsuit with Kokos for a similar reason that
15· · he did to Wantickets.· And this is where the
16· · revenue came from.· It didn't come from
17· · streaming, and it didn't come from anything
18· · like that.· I think it was the club that
19· · they -- that he defrauded also.
20· · · · Q.· Your counsel doesn't break out
21· · Kokos?
22· · · · A.· No, he doesn't break out anything in
23· · their filings.· Even Slacker, you don't know
24· · where the revenue comes from on the LiveXLive
25· · filings.· It's all very nontransparent.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Well, did you ever ask him?· I mean,
·3· · you could have asked him -- did you ever
·4· · think to ask Rob to break down this for you,
·5· · did you even try?
·6· · · · A.· I don't recall doing it.· But I also
·7· · recall that he didn't tell me he was in the
·8· · middle of a lawsuit with this company while
·9· · he was talking to me.· And, you know, that
10· · was another.
11· · · · Q.· That's not my question.
12· · · · · · Did you ask him to break down the
13· · financial information?
14· · · · A.· I don't recall.· I don't recall
15· · asking him.
16· · · · Q.· You know Richard Blakely, he checked
17· · the SEC filings and he was able to determine
18· · that LiveXLive didn't have any revenues or
19· · assets?
20· · · · A.· Well, Richard Blakely is the best.
21· · That's why I have him as my CEO, had him.
22· · · · Q.· Did he ever tell you that he
23· · discovered that?
25· · · · Q.· Look at Exhibit D to the complaint
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·1· · · · · · · · · ·Joseph Schnaier
·2· · which is PDF 124, which will take you too
·3· · long to get there.
·4· · · · A.· Repeat that?
·5· · · · Q.· Exhibit D to the amended complaint,
·6· · the amended complaint is Exhibit 2 and
·7· · Exhibit D is page 124.
·8· · · · A.· 124?
·9· · · · Q.· You got it.· Should I get a cup of
10· · coffee while you look for it?· It's 2:32.
11· · Let's see how long it takes for you to get
12· · there.
13· · · · A.· 124?
14· · · · Q.· Yes.
15· · · · A.· I'm here.
16· · · · Q.· You see here, it says, Overall
17· · update pipeline, November 17, 2015, correct?
18· · · · A.· Wait a second, wait a second,
19· · amended complaint --
20· · · · Q.· All right, you're not there.
21· · · · A.· Amended complaint paragraph 124?
22· · · · Q.· No, that's not what I said.· I said
23· · Exhibit D to the amended complaint which is
24· · page 124.· Excellent.· You're keeping your
25· · consistency, Mr. Schnaier, fantastic.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I won't take that as an offense.
·3· · · · Q.· You should not.
·4· · · · A.· Okay.· Exhibit D?
·5· · · · Q.· Which is on PDF page 124 is the
·6· · exhibit tab, 125 is the page.
·7· · · · · · Excellent.· We're on 2:33, the time,
·8· · I mean, so far a minute.
·9· · · · A.· I'm having problems with my --
10· · · · Q.· I'm sure you are.· 2:34.· We're at
11· · two minutes now, Mr. Schnaier.
12· · · · · · PDF page 124.· Exhibit D to the
13· · amended complaint.
14· · · · · · · ·MR. ISSER:· Josh, why don't you
15· · · · ·e-mail him a PDF of the amended
16· · · · ·complaint?· Maybe that's the problem.
17· · · · A.· I'll find it.
18· · · · Q.· I'm sure you will.
19· · · · · · · ·MR. WURTZEL:· Do you have the
20· · · · ·complaint?· We've referenced it
21· · · · ·before today.· Do you have it?
22· · · · · · · ·MR. ISSER:· I would think, but
23· · · · ·it seems to take him quite a long
24· · · · ·time.
25· · · · · · · ·MR. WURTZEL:· Because there are
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·probably 10 or 15 exhibits in the
·3· · · · ·complaint.
·4· · · · · · · ·MR. ISSER:· Right.· I told him
·5· · · · ·it's PDF page 124.· How hard is it?
·6· · · · · · · ·MR. WURTZEL:· Joe, can you
·7· · · · ·access the PDF pages?
·8· · · · · · · ·THE WITNESS:· No.· Is it
·9· · · · ·towards -- all the way at the bottom?
10· · · · · · · ·MR. ISSER:· It's now 2:35.· It
11· · · · ·took three minutes for Mr. Schnaier
12· · · · ·to find PDF page 124.
13· · · · A.· Exhibit D, right?
14· · · · Q.· Exhibit D.· PDF page 124.
15· · · · · · · ·MR. WURTZEL:· Is the issue
16· · · · ·finding it or downloading it?
17· · · · · · · ·THE WITNESS:· The issue is
18· · · · ·downloading it and finding it.· I'm
19· · · · ·at Exhibit K, but I don't see Exhibit
20· · · · ·D.
21· · · · · · · ·MR. ISSER:· It's on page 124 of
22· · · · ·the PDF pages.· You look at the top,
23· · · · ·you can do a thing on the top --
24· · · · · · · ·MR. WURTZEL:· I don't see PDF
25· · · · ·pages.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·MR. ISSER:· Did you download it
·3· · · · ·as a PDF?· Do you want to send him a
·4· · · · ·PDF e-mail?
·5· · · · · · · ·MR. WURTZEL:· Why don't you
·6· · · · ·just do a screen share for this one?
·7· · · · · · · ·MR. ISSER:· I'm using a
·8· · · · ·different computer.· My documents are
·9· · · · ·on a different computer.· It's 2:36,
10· · · · ·four minutes now to find that page of
11· · · · ·the document, Josh.
12· · · · · · · ·MR. WURTZEL:· I don't know what
13· · · · ·you want me to do.· It's a
14· · · · ·100-something page document.
15· · · · · · · ·MR. ISSER:· It's not that hard.
16· · · · ·Did you e-mail your client a PDF
17· · · · ·document?· Maybe he doesn't know how
18· · · · ·to download it as a PDF.· I honestly
19· · · · ·don't understand the problem.· Maybe
20· · · · ·you can give me an explanation of
21· · · · ·what we can do to cure this problem.
22· · · · · · · ·MR. WURTZEL:· This is the
23· · · · ·amended complaint?
24· · · · · · · ·MR. ISSER:· Yes.
25· · · · · · · ·THE WITNESS:· What page is it?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · · ·MR. ISSER:· PDF page 124.
·3· · · · · · · ·It's 2:37.· Five minutes.
·4· · · · · · · ·THE WITNESS:· Okay.· We're
·5· · · · ·here.
·7· · · · Q.· Just after five minutes, too bad.
·8· · · · · · All right.· You refer to this
·9· · document in your complaint, correct?
10· · · · A.· Are you talking about --
11· · · · Q.· I'm at Exhibit D.
12· · · · A.· -- the launch document?
13· · · · Q.· Overall update/pipeline, launch
14· · underneath that, yes.
15· · · · · · You refer to that in your complaint,
16· · right?
17· · · · A.· I think so.
18· · · · Q.· Let's put it this way.· Don't go
19· · back because I don't have another five
20· · minutes, but I will represent to you that
21· · paragraph 45 in your complaint says that in
22· · November 2015 Ellin sent Mr. Schnaier a copy
23· · entitled overall update pipeline that
24· · purported to list Ellin's plans for LiveXLive
25· · and this document is that document.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · So now I ask you, what did you think
·3· · was meant by the term pipeline in this
·4· · document?
·5· · · · A.· Things that he's working on or has
·6· · done.
·7· · · · Q.· Okay.· So it might not be things
·8· · that were included, correct?
·9· · · · A.· Possibly not.
10· · · · Q.· All right.· And did you ever discuss
11· · this document with Rob?
13· · · · Q.· What did he say to you and what did
14· · you say to him?
15· · · · A.· I have to read it.· I don't recall
16· · exactly what we would have discussed.
17· · · · Q.· As we go through it, you could tell
18· · me what he might have told you.
19· · · · A.· I mean, likely he was telling me
20· · that he had all this stuff done to get me to,
21· · you know, to get my company sold to him.
22· · · · Q.· He told you all the stuff in this
23· · was done?
24· · · · A.· Most likely he told me that this is
25· · what he's doing or got done for me to merge
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·1· · · · · · · · · ·Joseph Schnaier
·2· · with him.
·3· · · · Q.· I agree.· So in 2015, he told you
·4· · all these details were completed, under
·5· · launch?
·6· · · · A.· Let me read it.· I would have to
·7· · read one by one.· I don't remember every
·8· · item.· You want me to go through it one by
·9· · one with you?
10· · · · Q.· I'll go through it with you, how
11· · about that?
12· · · · · · Let's look at the fourth bullet
13· · point.· You see where it says, Six to eight
14· · festivals to be secured from May 2016 to May
15· · 2017?
16· · · · A.· Six to eight festivals, yes.
17· · · · Q.· All right.· Is that true?· Do you
18· · know if Rob -- did he claim that he secured
19· · them?· Here it says to be secured.· Do you
20· · know what process he was in, where in the
21· · process he was for these six to eight
22· · festivals?
24· · · · ·form.
25· · · · A.· I don't know.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Did you ask Rob where he was in the
·3· · process of securing these festivals?
·4· · · · A.· When?
·5· · · · Q.· Ever.
·6· · · · A.· I mean, I'm sure we spoke, you know,
·7· · pretty often when we were in the process of
·8· · merging.
·9· · · · Q.· What did you say to him and what did
10· · he say to you concerning the statement that
11· · there are six to eight festivals to be
12· · secured from May 2016 to May 2017?
13· · · · A.· He said there were six to eight
14· · festivals to be secured between 2016 and
15· · 2017.
16· · · · Q.· Did he say he had secured them?
17· · · · A.· Well, you have to be specific about
18· · which ones.
19· · · · Q.· Did he tell you which ones he was
20· · referring to?
21· · · · A.· Yes.· And he e-mailed -- a lot of
22· · them he e-mailed to me.
23· · · · Q.· What do you mean he e-mailed them to
24· · you?
25· · · · A.· He sent me messages, Just landed
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·1· · · · · · · · · ·Joseph Schnaier
·2· · this, just got this.
·3· · · · Q.· And this is now -- this is between
·4· · May 2016 and May 2017.· So this would have
·5· · been on his website before you signed the
·6· · APA, correct?
·7· · · · A.· We signed the APA in May 2016.
·8· · · · Q.· 2017, Mr. Schnaier.
·9· · · · A.· 2017, I'm sorry.
10· · · · Q.· So did you check the website to see
11· · if six to eight festivals in the 2016/2017
12· · season had been up for subscriptions up on
13· · the website for LiveXLive streaming events?
14· · · · A.· Possible, I don't recall.
15· · · · Q.· Well, how do you know it's not true
16· · that he obtained six to eight festivals from
17· · May 2016 to May 2017?
18· · · · A.· I don't know specifically what
19· · festivals you're talking about, but I do know
20· · that there are festivals that he told me that
21· · he landed or closed or whatever that had to
22· · that -- you know, to that sort of talk that
23· · didn't get done, which he said did get done.
24· · · · Q.· Well, you state in the next
25· · paragraph in the complaint that LiveXLive
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·1· · · · · · · · · ·Joseph Schnaier
·2· · never had -- never got and was not even
·3· · working on any of these deals or
·4· · partnerships.
·5· · · · · · So I'm asking how you know that to
·6· · be true, concerning the six to eight
·7· · festivals to be secured from May 2016 to May
·8· · 2017?
10· · · · ·form.
12· · · · A.· I believe if he had these festivals
13· · secured that he promised, that he told me of,
14· · he would have made some kind of announcement
15· · or it would have been on the site, it would
16· · have been done.
17· · · · Q.· So why when you signed the APA did
18· · you take any steps to see if any announcement
19· · about them was made or if they were on the
20· · site?
21· · · · A.· No.· Because some of them, it
22· · depends on what you're talking about
23· · specifically.
24· · · · Q.· I'm talking about the six to eight
25· · festivals.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Could you not interrupt me, please?
·3· · · · Q.· You asked what I'm talking about.
·4· · · · · · · ·MR. WURTZEL:· Finish the
·5· · · · ·answer, please.
·6· · · · A.· Some of them he was in the process
·7· · of still closing.· Some of them didn't happen
·8· · yet that he said got done but didn't get
·9· · done, just the festival wasn't there yet it
10· · was just in months or a year or whatever the
11· · case was.· You have to be specific on every
12· · festival.
13· · · · Q.· Oh, no, you made an allegation in
14· · the complaint, you listed this bullet point
15· · that said, Rob represented that there were
16· · six to eight festivals to be secured from May
17· · 2016 to May 2017, and then allege LiveXLive
18· · media never had -- never got and was not even
19· · working on any of these deals or
20· · partnerships.
21· · · · · · So I'm asking you, all these six to
22· · eight festivals would have occurred by May
23· · 2017 or in May 2017, before you signed the
24· · APA.· As you just said, it would be on their
25· · website and it would have been a press
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·1· · · · · · · · · ·Joseph Schnaier
·2· · release about the six to eight festivals, I
·3· · assume.· Did you follow up and see if they
·4· · secured these six to eight deals?
·5· · · · A.· A lot of them were, you know, they
·6· · could have still been in process and ready to
·7· · go and at that point in between that time,
·8· · you know, we were really working -- I was
·9· · running a business and we were working on
10· · that acquisition.· And I'm sure I was -- I
11· · had Richard, other people looking to see
12· · what's coming in.· LiveX people gave us
13· · updates, I just don't recall specifically.
14· · Ask me specific festivals.· I just don't
15· · recall specifically.
16· · · · Q.· I'm going by your allegation.· What
17· · specific festivals did Rob tell you --
18· · withdrawn?
19· · · · A.· I'm telling you --
20· · · · Q.· The question is withdrawn.
21· · · · · · So I don't understand what you mean
22· · some would still be in the process.· In 2015
23· · you were told that, you are claiming you were
24· · told that six to eight festivals would be
25· · secured from May 2016 to May 2017.· You
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·1· · · · · · · · · ·Joseph Schnaier
·2· · signed the APA on May 5, 2017.· Are you
·3· · saying there were still festivals that may
·4· · have occurred in May of 2017 that Rob had not
·5· · finalized the streaming rights by May 5,
·6· · 2017?
·7· · · · · · · ·MR. WURTZEL:· Objection of
·8· · · · ·form.
·9· · · · A.· I would not --
10· · · · · · · ·MR. WURTZEL:· Hold on.· I need
11· · · · ·to make the objection before you
12· · · · ·answer.· Give me a second.
13· · · · · · · ·Objection to form.· Now you can
14· · · · ·answer.
15· · · · A.· I don't know, because I wouldn't
16· · know.· I wasn't involved with those
17· · negotiations.
18· · · · Q.· Did you ask about the negotiations?
19· · Did ever say to Rob, Hey, you told me back in
20· · 2016 you were going to secure six to eight
21· · festivals by May 2017.· It's now May 4th,
22· · we're about to sign an asset purchase
23· · agreement tomorrow, whatever happened to
24· · those festivals?· Did you ever have a
25· · conversation in words or substance like that
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·1· · · · · · · · · ·Joseph Schnaier
·2· · with Rob?
·4· · · · ·form.
·5· · · · A.· I don't recall but I assume that I
·6· · did, I probably did.
·7· · · · Q.· What did he tell you?
·8· · · · A.· I don't recall, but he would tell
·9· · me, obviously, if I was okay with it, he must
10· · have told me everything was good.
11· · · · Q.· So on May 4th, there should have
12· · been signed contracts with six to eight
13· · festivals that were occurring in the next
14· · month.· And you -- and it should have been --
15· · did you ever ask him why it wasn't on the
16· · website then if they were doing festivals in
17· · the next 30 days?
19· · · · ·form.
20· · · · A.· I don't recall, but why would I
21· · assume he was a liar?
22· · · · Q.· Well, for any of these other bullet
23· · points on the launch, did you take any steps
24· · to check the website or SEC filings, or ask
25· · anyone to look into it, or the press
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·1· · · · · · · · · ·Joseph Schnaier
·2· · releases?· Did you take any steps to verify
·3· · whether any of these bullet points occurred?
·4· · · · A.· Like here, like I'll show you, like
·5· · look what he did on this.· Six to eight
·6· · venues and clubs, with ongoing content
·7· · concerts performances.
·8· · · · Q.· Right.
·9· · · · A.· So the only way that he would have
10· · had six to eight venues and clubs is through
11· · Wantickets's relationships that we ticketed.
12· · Because we ticketed most of the nightclubs,
13· · Vegas and in Miami.· So even something like
14· · this, I mean, he would just -- I don't know
15· · if he -- I don't think he just sent this to
16· · me, but he was -- he must have told other
17· · people, you know, before the Wantickets deal
18· · was done, I'm assuming.
19· · · · · · Because I'm just looking at this,
20· · I'm just realizing it now, but six to eight
21· · venues or clubs would probably have to come
22· · from Wantickets's relationships.· And that
23· · deal wasn't done yet.
24· · · · · · So if he's sending this around, I
25· · mean, he's misleading other people other than
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·1· · · · · · · · · ·Joseph Schnaier
·2· · myself, and that I can see that right away.
·3· · There are some other things here.· None of
·4· · this stuff -- digital residency, I mean, I
·5· · looked at this stuff, you know, even this
·6· · acquisition, multiple -- like he's sending
·7· · this to other people with Wantickets's
·8· · ticketing, LOI next two weeks, I mean, this
·9· · is obviously misleading to me.
10· · · · Q.· That's a good point, Mr. Schnaier.
11· · · · A.· Right.
12· · · · Q.· The acquisition -- let me finish.
13· · · · A.· I realize that now.
14· · · · Q.· Let me finish my question.
15· · · · · · There's acquisition multiple in
16· · works, i.e., ticketing, Wantickets letter of
17· · intent next two weeks.· Is that true?· There
18· · was going to be a letter of intent with
19· · Wantickets in the next two weeks?
20· · · · A.· I don't recall when this was done.
21· · So I don't know.
22· · · · Q.· It's dated 11/17/15.· So let's
23· · assume November 17, 2015.· Is that true?
24· · · · A.· I didn't -- I don't recall the LOI
25· · being done until July.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· All right.· So why did you then
·3· · accept all these other representations
·4· · without looking further if you didn't agree
·5· · with the one that you knew anything about?
·6· · · · A.· Well, the better question is --
·8· · · · ·form.
·9· · · · Q.· I'd rather you answer the question I
10· · asked.
11· · · · A.· The question is, I don't recall why
12· · at that time what I was thinking, but the
13· · better question is why is he writing this?
14· · · · Q.· The cause of your question asks for
15· · verification for any of the other things he
16· · said, though, is that correct?
17· · · · A.· I'm sorry, can you repeat that?
18· · · · Q.· Withdrawn.· Have you looked at
19· · paragraph 47 of the complaint, you write, On
20· · January 22, 2016, Ellin e-mailed Schnaier
21· · stating that LiveXLive Media had signed a
22· · deal with China Brands.
23· · · · · · When did you discover that wasn't
24· · true?· Let me ask, while you're thinking, let
25· · me ask the next paragraph, On January 26,
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·1· · · · · · · · · ·Joseph Schnaier
·2· · 2016, Ellin again e-mailed Mr. Schnaier
·3· · stating that China Brands will be announced
·4· · tomorrow and Randy Jackson joining team.· And
·5· · you say that that's a known lie -- this is
·6· · also a known lie.· Do you know if China
·7· · Brands was announced the next day?
·8· · · · A.· I don't recall, but I don't remember
·9· · Randy Jackson ever being brought to the team.
10· · · · Q.· Did you ever follow up to see if
11· · China Brands was announced the next day?
12· · · · A.· The Randy Jackson thing was probably
13· · more appealing to me.
14· · · · Q.· I'm not asking you what is appealing
15· · to you.· I'm asking you, did you follow up
16· · whether China Brands was announced the next
17· · day?
18· · · · A.· It's possible, I don't recall.
19· · · · Q.· Well, did you take any steps to
20· · determine -- when did you learn that there
21· · was no deal with Randy Jackson or no deal
22· · with China Brands?
23· · · · A.· By the time I -- well, before we
24· · filed the suit, all the information.
25· · · · Q.· How did you find that out?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I don't recall exactly how I found
·3· · it out.
·4· · · · Q.· What did you do after all this in
·5· · order to file a lawsuit that you didn't do
·6· · before to learn all of this information?
·7· · · · A.· Probably started to dig deeper after
·8· · I got defrauded by him.
·9· · · · Q.· Would you have dug deeper before you
10· · invested money in LiveXLive Media or sold
11· · your business to LiveXLive Media?
13· · · · ·form.
14· · · · A.· That doesn't give him the right to
15· · defraud me.
16· · · · Q.· Well, Mr. Ellin's claiming
17· · announcements would be made tomorrow and
18· · they're not made, a letter of intent going
19· · out in two weeks when they're not, didn't you
20· · see that as a red flag that maybe you should
21· · look into these things --
23· · · · ·form.
24· · · · Q.· -- of another claim Mr. Ellin made
25· · to you?
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·1· · · · · · · · · ·Joseph Schnaier
·3· · · · ·form.
·4· · · · A.· I don't recall seeing that back then
·5· · or focusing on it.· But I don't know what I
·6· · was thinking, I don't know, I don't recall.
·7· · · · Q.· You just decided to trust Mr. Ellin
·8· · because he's the chairman of a
·9· · publically-traded company, correct?
10· · · · A.· No.· Not at all.· I just -- I don't
11· · know at that time what the situation was,
12· · where I would have -- it could have been I
13· · told him to correct it.· It could have been
14· · anything.· I just don't recall.
15· · · · Q.· I'm not talking about just the
16· · Wantickets.· It would have been easy for you
17· · to investigate whether the things in these
18· · launch bullet points are correct as you found
19· · out after the complaint was filed that you
20· · claim them to be incorrect.
21· · · · · · So my question to you is, why didn't
22· · you take those steps before investing in
23· · LiveXLive, selling your company to LiveXLive.
24· · Those steps you took afterwards, why didn't
25· · you take before?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· It's a good question.· I had
·3· · attorneys.· I had attorneys, and, you know,
·4· · we did the best we could, I guess.· Looking
·5· · back, anyone could change the way you do
·6· · things all the time.· But, you know, that's
·7· · the old saying, had I known now -- had I
·8· · known then what I know now, you know.
·9· · · · Q.· But isn't it standard to do due
10· · diligence before making an investment to sell
11· · your company when you're receiving stock for
12· · the company?
13· · · · A.· We did some due diligence.· I mean,
14· · we did our due diligence and, obviously, it
15· · wasn't enough probably.
16· · · · Q.· Well, what due diligence --
17· · · · A.· But, still, like I said, that
18· · doesn't give him the right to defraud
19· · somebody.
20· · · · Q.· I'm not asking you about his rights.
21· · I just find it interesting that you make all
22· · these allegations about things Rob said and
23· · did that aren't true, but in the complaint
24· · you seemed to be able to get the information.
25· · · · · · What is the reason you didn't get
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·1· · · · · · · · · ·Joseph Schnaier
·2· · that information before?· Did Mr. Ellin give
·3· · you documents?· Did you ask him follow-up
·4· · questions and he lied to you?· Explain to me,
·5· · did you just accept what he was saying and
·6· · made the investment to sell your company?
·7· · · · A.· Well, these, it only became more
·8· · apparent to me and getting more involved in
·9· · this stuff after he already, you know,
10· · totally lied and deceived after we closed the
11· · APA.
12· · · · · · So that's when, you know, things --
13· · everything started coming out.· I started
14· · looking into it more.· And not only that,
15· · people were coming out of the woodworks
16· · saying, You know, they did this to me and
17· · they did this to this person.· Listen, he's
18· · notorious for this.
19· · · · · · There's no going about it and you
20· · could protect him and put me on the defensive
21· · why I didn't do enough due diligence, but at
22· · the end of the day, this guy lied and cheated
23· · me, deceived me and he defrauded me.
24· · · · Q.· That's not responsive to my
25· · question.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · But you claim Mr. Ellin is
·3· · notorious.· Was he notorious before you
·4· · invested $1.25 million and before you sold
·5· · your company to him in exchange for stock?
·6· · Did he have the same notoriety in 2015 that
·7· · you claim he has now?
·8· · · · A.· It's possible he did but for me
·9· · personally, he didn't.
10· · · · Q.· That's my question.
11· · · · A.· No.
12· · · · Q.· Thank you, Mr. Schnaier.
13· · · · A.· The answer is, to me he didn't have
14· · that notoriety prior.
15· · · · Q.· But did you ask around about this?
17· · · · Q.· And the one deal that you had with
18· · Mr. Ellin resulted in you being fined by
19· · FINRA and being removed from the securities
20· · industry, correct?
21· · · · A.· If I would have paid that fine I
22· · wasn't going to be removed.
23· · · · Q.· The one dealing with him before this
24· · resulted in what you said was worse than
25· · gotten to your reputation, correct?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· That was later on.
·3· · · · Q.· Withdrawn.
·4· · · · · · Did anybody from LiveXLive discuss
·5· · Shaquille O'Neill with you?
·6· · · · A.· Yes, he did.
·7· · · · Q.· What did Rob say to you and what did
·8· · you say to him about Shaquille O'Neill?
·9· · · · A.· I don't recall the exact date, but
10· · he said Shaquille was coming on, I believe,
11· · at that time he was coming on as the advisory
12· · board and he was going to be very helpful
13· · with his relationship, especially in the
14· · music world because he was, at that time he
15· · was getting very popular.· He was a deejay
16· · and not only a basketball player, one of the
17· · greats, but he was also a deejay and he was
18· · doing some rap with some other very popular
19· · rappers.
20· · · · · · And he was going to bring all these
21· · relationships for festivals because he
22· · actually plays in festivals.· And he was
23· · going to be involved in bringing the
24· · relationships, and that was a blessing to me.
25· · I'm an MBA fan, I'm a Shaquille O'Neill fan
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·1· · · · · · · · · ·Joseph Schnaier
·2· · as well, and I found that very interesting.
·3· · · · · · Later to find out that he didn't do
·4· · anything for LiveXLive and I don't even know
·5· · if he met Rob personally.· He had nothing to
·6· · do with the company other than have some
·7· · shares for the advisory board.
·8· · · · Q.· Do you claim Rob misled you about
·9· · whether LiveXLive had rights to stream Rock
10· · in Rio?
11· · · · A.· No.· I believe they had the rights
12· · to stream Rock in Rio.· I think they do
13· · stream Rock in Rio.
14· · · · Q.· All right.· Did you ever meet Rob in
15· · the Trump International Hotel in Manhattan in
16· · May of 2016?
17· · · · A.· Yes.
18· · · · Q.· And who attended?
19· · · · A.· Me, Rob, and his son Alex.
20· · · · Q.· And what was discussed at that
21· · meeting?
22· · · · A.· He was discussing, I believe, at
23· · that time he was discussing making the
24· · investment at that time into the company.
25· · · · Q.· Was the investment tied to a merger
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·1· · · · · · · · · ·Joseph Schnaier
·2· · or sale of Wantickets by LiveXLive?
·3· · · · A.· No.
·4· · · · Q.· Did you discuss an investment -- did
·5· · you discuss the sale of Wantickets's assets
·6· · or a sale of Wantickets to LiveXLive before
·7· · the investment?
·8· · · · A.· It's possible we did, yes, I believe
·9· · so.
10· · · · Q.· When did you first start discussing
11· · with Rob possible sale of Wantickets or its
12· · assets to LiveXLive?
13· · · · A.· I don't recall the date.
14· · · · Q.· And what was discussed at this May
15· · 2016 meeting again?
16· · · · A.· You mean the meeting at the Trump
17· · hotel?
18· · · · Q.· Yes.
19· · · · A.· I believe it was mostly in regards
20· · to him, you know, talking to me about -- it
21· · seemed as though he was pretty -- he was out
22· · there trying to raise money.
23· · · · Q.· All right.· Well, then you claim at
24· · the meeting he said he was raising capital
25· · from other investors at $5 a share.· Do you
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·1· · · · · · · · · ·Joseph Schnaier
·2· · know if that's true?
·3· · · · A.· I found out later, it's not true.
·4· · · · Q.· Well, you said the market price was
·5· · $5 a share when you made your investment,
·6· · which is a month later.· So why is that not
·7· · true?
·8· · · · A.· That's something he's going to have
·9· · to answer for, because that's not right what
10· · he did.
11· · · · Q.· I didn't ask you that.· You said
12· · that $5 a share was the market price in June
13· · of 2016.· So I'm going to ask you, how do you
14· · know it's not true -- how do you know he
15· · wasn't raising money from other investors at
16· · $5 a share?
17· · · · A.· Because we -- it's that discovery
18· · that people never paid that.
19· · · · Q.· When and how did you discover this?
20· · · · A.· That's privileged.
21· · · · Q.· You were provided an opportunity of
22· · due diligence, correct, before the asset
23· · purchase agreement was signed?
25· · · · ·form.
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·1· · · · · · · · · ·Joseph Schnaier
·3· · · · · · And you say -- who is the Bass
·4· · family?
·5· · · · A.· Excuse me?
·7· · · · · · What steps, if any, did you take in
·8· · May of 2016 to determine if Rob was raising
·9· · money from other investors at $5 a share?
10· · · · A.· Like I said, the stock was trading
11· · at around $5 a share, and that's -- he
12· · charged me, that's what I figured, you know,
13· · that's what everyone was paying.· Because
14· · that's where it was trading at.· Not knowing
15· · that he gave favorable deals to different
16· · people, friends and family at much cheaper
17· · prices based on nothing.
18· · · · Q.· Were you a friend or family of
19· · Rob's?
20· · · · A.· Obviously not.
21· · · · Q.· But why would you be a friend?· You
22· · said you only knew him from afar when you
23· · started discussing --
24· · · · A.· I didn't say I was a friend.
25· · · · Q.· You said obviously not.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Obviously not, he charged me $5,
·3· · everyone else got much cheaper.
·4· · · · Q.· You said that was a friend and
·5· · family price?
·6· · · · A.· No, that's more of like a flea
·7· · market kind of thing, you know.
·8· · · · Q.· And you said Bass family invested
·9· · $10 million, did you ever ask him to verify
10· · that with documentation?
11· · · · A.· Possible, I don't recall.
12· · · · Q.· Who is the Bass family?
13· · · · A.· I believe they're a very wealthy
14· · family in Texas.
15· · · · Q.· Had you heard of them before Rob
16· · mentioned them to you?
17· · · · A.· I think so.
18· · · · Q.· You think so.· I mean, you seem to
19· · think it's a pretty important thing that they
20· · invested in LiveXLive, no?· Or am I missing
21· · something?
23· · · · ·form.
24· · · · Q.· Did that sway you?· Did you rely on
25· · the fact that the Bass family had invested
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·1· · · · · · · · · ·Joseph Schnaier
·2· · $10 million in LiveXLive in deciding whether
·3· · or not to make an investment in LiveXLive
·4· · media?
·5· · · · A.· I don't know about that, but it's
·6· · definitely impressive to have a rich -- a big
·7· · family like that, a successful family put
·8· · money into a company.
·9· · · · Q.· Let's look at tab 63, please.
12· · · · ·e-mail exchanged as Defendants'
15· · · · Q.· Before we get to that, when you say
16· · he told you the Bass family had invested, did
17· · you understand what he meant by invested?
18· · · · A.· I think he -- to the best of my
19· · recollection, I think he sent me something on
20· · e-mail or the term sheet that they were
21· · giving them.· I don't remember exactly.· But
22· · there was something -- there was something
23· · there that showed that he was talking to
24· · them.
25· · · · Q.· All right.· But when he said
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·1· · · · · · · · · ·Joseph Schnaier
·2· · invested, that could be a loan, correct?· It
·3· · didn't necessarily mean that they were buying
·4· · shares?
·6· · · · ·form.
·8· · · · A.· No.· A loan would be debt.· An
·9· · investment is an equity position, I believe.
10· · · · Q.· All right.· Well, that's fine but
11· · here, if you look at tab 63, and the top
12· · e-mail is from David Bass to Robert Ellin and
13· · Joe Schnaier dated August 12, 2016.· It's an
14· · e-mail exchange.· Did you send and receive
15· · these e-mails?
16· · · · A.· Did I -- I'm sorry, did I what?
17· · · · Q.· Did you send and receive these
18· · e-mails?
19· · · · A.· Did I send these e-mails?
20· · · · Q.· And receive them.· It's an e-mail
21· · chain; you understand it's more than one
22· · e-mail.· Some you sent, some you received.
23· · I'm asking you if you sent or received all of
24· · these e-mails?
25· · · · A.· It looks like it.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · Q.· Okay.· That's the answer then.
·3· · · · · · Now, on the bottom, you say, Please
·4· · send me Bass family bridge docs, correct?
·5· · · · A.· I see that I wrote that.
·6· · · · Q.· And then after a few e-mails, David
·7· · then says, this one from January and if you
·8· · scroll down they sent you the Bass family
·9· · loan bridge doc, right?
10· · · · A.· It looks like it.
11· · · · Q.· And why did you ask for the Bass
12· · family loan bridge doc?
13· · · · A.· I don't recall the exact
14· · circumstances.· I don't remember the exact
15· · circumstances.
16· · · · Q.· Was it because when he told you
17· · about the Bass family investment he was
18· · referring to -- well, this is a convertible
19· · loan note, right?· So that would be --
20· · · · A.· Oh, wait a second, I remember this.
21· · I remember this.· I'm sorry.· This -- he
22· · asked me to try to go to someone to get a
23· · bridge loan.· And he said these are the terms
24· · he's doing with the Bass family.· So I asked
25· · him for that.· That's what it was.· It wasn't
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·1· · · · · · · · · ·Joseph Schnaier
·2· · my investment.· He wanted me to go help him
·3· · raise money.
·4· · · · Q.· I see.· But did this demonstrate he
·5· · was discussing an investment with the Bass
·6· · family?
·7· · · · A.· This shows, I mean, -- can I read
·8· · it?
·9· · · · Q.· Did you ever ask him -- this says
10· · convertible notes, so that would be an
11· · investment, correct?
12· · · · A.· It converts into equity.
13· · · · Q.· Did you ever ask him if this
14· · investment closed?
15· · · · A.· I was under the assumption, he made
16· · it seem as though it closed.
17· · · · Q.· How did he make it seem it's closed
18· · -- withdrawn.
19· · · · · · Did you ever ask him then to see the
20· · signed documents?
21· · · · A.· I don't recall, but I don't think
22· · that's really -- I don't think you're
23· · supposed to show someone's personal signed
24· · documents.· Maybe the Bass family didn't
25· · want -- you know, that's like a very touchy
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·1· · · · · · · · · ·Joseph Schnaier
·2· · kind of thing.· I don't think he would do
·3· · that.
·4· · · · Q.· Was this sheet already sent to you?
·5· · · · A.· He sent it to me.
·6· · · · Q.· So you didn't think to ask him --
·7· · · · A.· I didn't think --
·8· · · · · · · ·MR. WURTZEL:· Hold on, stop.
·9· · · · ·Objection to form.· I don't think
10· · · · ·there was a complete question, so
11· · · · ·wait.
12· · · · Q.· If he showed you this, why didn't
13· · you ask him to include the investment he said
14· · it includes?
16· · · · ·form.
17· · · · A.· Can you repeat that, please?
18· · · · Q.· If he sent you the term sheet, why
19· · didn't you ask him for proof that the
20· · investment closed?
21· · · · A.· I don't recall if I did or I didn't,
22· · but I think the way I read -- as far as I
23· · know, some of the investments closed already.
24· · So I don't know if I asked him to see a doc
25· · or if he showed it or at the end of the day I
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·1· · · · · · · · · ·Joseph Schnaier
·2· · don't even think they did close, unless I'll
·3· · be shocked if they did.
·4· · · · Q.· And when did you learn they didn't
·5· · close?
·6· · · · A.· Someone told me -- I heard from this
·7· · a while ago.· It was already -- it was
·8· · after -- it was already probably after my
·9· · lawsuit, or a little before the lawsuit.
10· · · · Q.· Before you signed the subscription
11· · agreement, were there any other
12· · representations that Rob made to you which
13· · you claim are not true, which we haven't
14· · discussed?
15· · · · A.· I think there were many.
16· · · · Q.· I'm saying before you signed the
17· · subscription agreement and invested 1.25
18· · million what statements did Rob say to you
19· · that you believe were not true that we have
20· · not yet discussed?
21· · · · A.· For many -- I have to go through
22· · my -- I have to go through records.· I can't
23· · recall offhand.
24· · · · Q.· Any come to mind that we haven't
25· · discussed?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· I can't recall, I'm sorry.· I don't
·3· · want to make a mistake.
·4· · · · Q.· That's fine.
·5· · · · · · Now, before you executed the
·6· · subscription agreement, did you ask Rob --
·7· · did you or anyone at Wantickets ask Rob or
·8· · anyone at LiveXLive for any documents
·9· · concerning LiveXLive's business?
10· · · · A.· Did I or anybody -- can you repeat
11· · that, please?
12· · · · Q.· Did you either -- did you ask before
13· · signing the subscription agreement, did you
14· · ask Rob or anyone at LiveXLive for any
15· · documents concerning LiveXLive's business?
16· · · · A.· To the best of my recollection, I'm
17· · sure I did.· I believe I did.
18· · · · Q.· What did you ask for?
19· · · · A.· I don't know.· I don't know exactly
20· · specifically what you're asking, but I'm sure
21· · I asked for documents and stuff.
22· · · · Q.· And did they ever refuse to provide
23· · you with documents you requested?
24· · · · A.· Typically, you know, Rob would
25· · really only send what he wants you to see.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · Not, you know, nothing more nothing less.
·3· · · · Q.· I'm not asking -- in response -- did
·4· · you ever request documents -- you can't seem
·5· · to remember any specific documents you
·6· · requested, so we're going to do this
·7· · generally.
·8· · · · · · Did Rob or LiveXLive ever refuse to
·9· · send you documents that you requested, and if
10· · they did, tell me?
11· · · · A.· Oh, yes, yes.
12· · · · · · · ·MR. WURTZEL:· Hold on, stop,
13· · · · ·objection to form.
15· · · · A.· Okay.· Yes, they did.
16· · · · Q.· What?
17· · · · A.· I recall asking to see the cap
18· · table.
19· · · · Q.· And they said no?
20· · · · A.· Yes.
21· · · · Q.· All right.· Anything else?
22· · · · A.· He said it wasn't -- I wasn't
23· · allowed to see that.
24· · · · Q.· Okay.· Anything else?
25· · · · A.· To the best of my recollection,
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·1· · · · · · · · · ·Joseph Schnaier
·2· · there were probably some stuff there with
·3· · regards to the Bank of Montreal documentation
·4· · which also I probably wasn't allowed to see.
·5· · · · Q.· So this is actually -- let's use the
·6· · APA.
·7· · · · A.· And then there is the -- you see if
·8· · you give me, you know, line by line items,
·9· · I'll be able to tell you.
10· · · · Q.· What did you ask for -- instead of
11· · making it for the subscription agreement,
12· · let's make it before signing the asset
13· · purchase agreement.
14· · · · · · So you asked for the cap table at
15· · some point and he said he couldn't give you
16· · that.· What did you ask for concerning Bank
17· · of Montreal that he couldn't show you?
18· · · · A.· I don't recall specifically what I
19· · asked for.· But there are things that I asked
20· · just to see what's going on, how it's moving
21· · along, I guess.
22· · · · Q.· Well, you're aware that Bank of
23· · Montreal filed an S1 after the Wantickets
24· · deal closed within days, correct?
25· · · · A.· Was that Bank of Montreal or was
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·1· · · · · · · · · ·Joseph Schnaier
·2· · that LiveXLive that filed it?
·3· · · · Q.· Well, Bank of Montreal was going to
·4· · be the underwriter, but the S1 was filed by
·5· · LiveXLive after the APA closed, correct, are
·6· · you aware of that?
·7· · · · A.· That's different than saying Bank of
·8· · Montreal filed --
·9· · · · Q.· I rephrased the question.· That was
10· · a great point, Mr. Schnaier.· You got me.
11· · Good for you.
12· · · · · · So days after the asset purchase
13· · agreement was signed, did LiveXLive file an
14· · S1 with the Bank of Montreal as the
15· · underwriter?
16· · · · A.· I think so.
17· · · · Q.· And in that S1 that Bank of Montreal
18· · was a part of a statement they were seeking
19· · to raise $100 million?
20· · · · A.· I don't recall the exact filing.
21· · · · Q.· Okay.· Because that's the
22· · representation that you believe was
23· · fraudulently made to you, that they were
24· · having an offering to raise $100 million,
25· · correct?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Well, Bank of Montreal stated on the
·3· · record --
·4· · · · Q.· That's not the question -- go ahead.
·5· · · · A.· I'm answering it.
·6· · · · Q.· Go on.
·7· · · · A.· From my understanding, Bank of
·8· · Montreal said that there was never anything
·9· · committed or done deal in regards to the $100
10· · million.
11· · · · · · So for someone to say, you know,
12· · it's signed and done, that's very inaccurate.
13· · · · Q.· Wait a minute --
14· · · · A.· It's far from signed and done.
15· · · · Q.· Where did -- they filed an S1 and
16· · Bank of Montreal is going to be the
17· · underwriter.· You were at Bank of Montreal's
18· · deposition, weren't you, Mr. Schnaier?
19· · · · A.· I believe I was for some of it.
20· · · · Q.· And did you not get the
21· · understanding that Bank of Montreal fully
22· · believed that there would be an IPO and that
23· · it would raise $100 million when the S1 was
24· · filed?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·You're asking the witness to
·3· · · · ·speculate about what someone else
·4· · · · ·believed?
·5· · · · · · · ·MR. ISSER:· I'm asking the
·6· · · · ·witness what he believed.
·7· · · · A.· I didn't interpret it that way.· All
·8· · I heard was that there was definitely nothing
·9· · signed and sealed and committed and
10· · guaranteed that Bank of Montreal was raising
11· · $100 million.· And if that was the case, then
12· · what happened to that $100 million?
13· · · · Q.· That's for another day, Mr.
14· · Schnaier.· But there's a difference -- would
15· · you agree there's a difference between
16· · believing you could raise $100 million and
17· · being wrong and failing and lying about it?
18· · · · A.· Well, when a chairman sends you an
19· · e-mail saying done deal, 75 -- 100 to 120 --
20· · whatever that number was on an e-mail to me
21· · directly, the chairman of a public company
22· · claiming that Bank of Montreal, one of the
23· · largest investment banks in the world is
24· · going to raise $100 million, done, signed,
25· · and done, I mean, that's a pretty strong
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·1· · · · · · · · · ·Joseph Schnaier
·2· · statement to say.
·3· · · · · · And when it doesn't happen, I mean,
·4· · that's a pretty -- that's a big, you know,
·5· · there was no -- there was no -- zero press
·6· · releases after that stating why it didn't
·7· · happen, when it was going to happen, it was
·8· · dead silence for months after that.
·9· · · · Q.· Dead silence?
10· · · · A.· And then they waited until a few
11· · months later and then another small little
12· · firm came in and raised about $20 million.
13· · · · Q.· Let me ask you this.
14· · · · · · You've taken companies public,
15· · you've been a broker, you've owned a branch
16· · of a brokerage, you've been in the securities
17· · industry for years and years and years.· Is
18· · there ever a guarantee about how much money
19· · an IPO is going to raise?
21· · · · ·form.
22· · · · Q.· Just answer the question yes or no.
23· · · · A.· It depends on the deal.· Sometimes
24· · bankers can make best effort deals and
25· · sometimes the bankers will actually commit to
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·1· · · · · · · · · ·Joseph Schnaier
·2· · an actual number and they get it done.· It
·3· · all depends on the type of deal, from what I
·4· · know.· And this was a best efforts deal that
·5· · Rob made everyone think was a done committed
·6· · deal by his e-mail.
·7· · · · Q.· When did you find out it was a best
·8· · efforts deal?
·9· · · · A.· Through the deposition.· That's the
10· · way I interpreted it.
11· · · · Q.· So you didn't know that it was a
12· · best efforts deal until after you filed this
13· · lawsuit?
14· · · · A.· No.· Rob sent me an e-mail it was a
15· · done deal, they're raising 100 million.
16· · · · Q.· You're saying it was a best efforts
17· · deal.· When did you learn it was a best
18· · efforts?
19· · · · A.· I learned the best efforts --
20· · obviously, the deal never happened.· So it
21· · wasn't a committed deal.· And I learned
22· · during the deposition they came out and said
23· · they had never anything signed with LiveX or
24· · Rob committing them to raise 100 million.
25· · · · Q.· And before you signed the APA did
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·1· · · · · · · · · ·Joseph Schnaier
·2· · you ask Rob if he had anything signed with
·3· · Bank of Montreal committing them to raise
·4· · $100 million?
·5· · · · A.· Not only did I ask Rob, but I had a
·6· · conversation with the CFO, Jerry Gold, who is
·7· · a veteran in the industry and comes from some
·8· · very good companies in the past.· And I
·9· · specifically had conversation with him in my
10· · office saying, How are you getting such a
11· · really good valuation from Bank of Montreal?
12· · He said, This industry, they're giving us the
13· · same comps, and this is verbatim, as Netflix.
14· · · · Q.· But what does that have to do with
15· · whether it's a best effort for a signed deal?
16· · I'm asking, did you ever ask Rob Ellin or
17· · anyone at LiveXLive whether Bank of Montreal
18· · was committed to raising $100 million as
19· · opposed to a best efforts deal?· Your answer
20· · has nothing to do with that.
21· · · · A.· My answer, you heard my answer, my
22· · answer was yes, and to even reiterate, he
23· · sent me an e-mail confirming it.
24· · · · Q.· What e-mail -- who sent you an
25· · e-mail confirming it?
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· Rob Ellin.
·3· · · · Q.· Confirming what?· That they were
·4· · obligated?
·5· · · · A.· Confirming that they signed to raise
·6· · them $100 million deal.
·7· · · · Q.· Signed can also mean signed to file
·8· · an S1 for 100 million?
·9· · · · A.· Steve, you know better than that.
10· · · · Q.· Let's look at --
11· · · · · · · ·MR. WURTZEL:· Steve, whenever
12· · · · ·the next logical place is, let's take
13· · · · ·a short break.
14· · · · · · · ·MR. ISSER:· All right.· Let's
15· · · · ·look at tab 20.· The subscription
16· · · · ·agreement.
17· · · · Q.· If you look at section 2(g)(iv), The
18· · undersigned has been provided an opportunity
19· · for a reasonable period of time prior to the
20· · date hereof to obtain additional information
21· · concerning the offering of shares and
22· · warrant.· The company and all other
23· · information, to the extent the company
24· · possesses such information or can acquire it,
25· · without a reasonable effort or expense.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · Do you see that?· You were provided
·3· · an opportunity to obtain information before
·4· · filing -- before making this investment,
·5· · correct?
·6· · · · A.· Yes.· But this is a boilerplate. I
·7· · can't even read it, it's blurry.
·8· · · · Q.· I read it to you because I knew
·9· · you'd say that.· You signed this before
10· · paying the money, you signed it acknowledging
11· · what I just said?
12· · · · A.· I acknowledge it.
13· · · · Q.· Okay.· And 2(g)(v) says, The
14· · undersigned was able to ask questions of and
15· · receive answers from the company for persons
16· · acting on its behalf concerning the terms and
17· · conditions of this transaction.
18· · · · · · Is that correct?· You signed it, you
19· · agree that you were given the opportunity to
20· · ask questions and get answers, correct?
21· · · · A.· I can't read it, but I signed it, so
22· · it's in there.
23· · · · Q.· Now, if you look at 2(h), you know
24· · what -- let's see if the other subscription
25· · agreement has a better copy.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · · · Go to the second subscription
·3· · agreement.· It's on page 12 on the PDF.· I'm
·4· · going to regret this because it's going to
·5· · take a while.· But it's 3:18.· Let's see.
·6· · · · · · You see this?· It's saying --
·7· · · · A.· I got it.
·8· · · · Q.· Great.· And that's record time, Mr.
·9· · Schnaier.· So 2(g)(h), let's go to.· You see
10· · it says, The undersigned, that's you, not
11· · relying on the company or its affiliates with
12· · respect to economic considerations involved
13· · in this investment.· The undersigned has
14· · relied solely on its own advice.
15· · · · · · Under that it says, No
16· · representations or warrantees have been made
17· · to the undersigned by the company or any
18· · officer, employee, agent, affiliate or
19· · subsidiary of the company.· And in
20· · subscribing to the shares of the warrant, the
21· · undersigned is not relying on any other
22· · representations or warrantees of the company.
23· · Do you see that?
24· · · · A.· I see it.
25· · · · Q.· But you're claiming you were relying
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·1· · · · · · · · · ·Joseph Schnaier
·2· · on things that Rob said to you in making this
·3· · investment; is that correct?
·4· · · · A.· I was relying, yes.
·5· · · · Q.· Okay.· But you signed an agreement,
·6· · you signed the subscription agreement --
·7· · · · A.· I don't think --
·8· · · · Q.· Let me finish my question.
·9· · · · · · You signed the subscription
10· · agreement in which you stated you were not
11· · relying on any statements made by Rob to the
12· · company; is that correct?
13· · · · A.· Yes.· But I don't think this is
14· · meant for --
15· · · · Q.· Okay.· You could -- I didn't ask
16· · you --
17· · · · A.· Let me finish.
18· · · · Q.· I just asked you if you signed the
19· · agreement.
20· · · · · · Your lawyer can give you direct --
21· · cross-examination when I'm done.· And you
22· · could say everything beyond my questioning
23· · you want when your lawyer questions you. I
24· · want you to answer my question.
25· · · · · · I asked you a question, if you
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·1· · · · · · · · · ·Joseph Schnaier
·2· · signed the agreement that said what I just
·3· · read to you, and the answer is yes, you did.
·4· · · · · · You think it means something else,
·5· · that's on your lawyer's time, Mr. Schnaier.
·6· · · · · · You state -- you claim in the
·7· · complaint that Mr. Ellin continues to defraud
·8· · the public and SEC filings.· How so?
·9· · · · A.· I believe, I'm reading through
10· · his --
11· · · · · · · ·THE WITNESS:· Can we take a
12· · · · ·break here?
13· · · · · · · ·MR. ISSER:· I'd like an answer
14· · · · ·first and then yes.
15· · · · A.· I want -- I mean I want to go to the
16· · bathroom before I talk.
17· · · · Q.· I'd like to hear your answer first.
18· · This would be a good opportunity for you to
19· · quickly answer my questions.· So let's get to
20· · it.
21· · · · A.· Okay, repeat the question?
22· · · · · · · ·MR. ISSER:· Read back the
23· · · · ·question, please.
24· · · (Whereupon, at this time, the requested
25· ·portion was read by the reporter.)
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · A.· It is my belief that a lot of these
·3· · releases and filings that he puts out are
·4· · misleading, mostly in regards to the
·5· · financials.
·6· · · · · · In my humble opinion, and just
·7· · saying, when he releases these financials and
·8· · puts out these press releases, such as
·9· · LiveXLive has record breaking year, for
10· · instance, LiveXLive's streaming is never
11· · broken down, and you can't tell where the
12· · revenue is coming in from streaming or
13· · whether it's coming from Legacy Acquisition.
14· · · · · · And when he says, you know, the
15· · company went, you know, to seven and a half
16· · million in revenue for a quarter, I'm just
17· · giving you an example.· I'm not being
18· · specific.· I believe that those are
19· · misleading because there was zero revenue
20· · from LiveX especially in streaming.· That
21· · quarter that they're comparing from the year
22· · before and then when they put this year's out
23· · they already did an acquisition of, for
24· · example, Slacker, and they will use the
25· · Slacker revenue as though they created all of
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·1· · · · · · · · · ·Joseph Schnaier
·2· · this blockbuster record revenue.· And people
·3· · are thinking that they're growing at, you
·4· · know, 200 percent, a crazy growth rate where
·5· · it's just not true.
·6· · · · · · And if you want to go through
·7· · financials, I can have someone, a specialist
·8· · come in and go through the last couple of
·9· · years with their press releases and their
10· · financials, and sit down with you and show
11· · you that these press releases are extremely
12· · misleading.· And there really isn't any
13· · record breaking unless you want to consider
14· · record breaking when you're starting at zero,
15· · I guess, $1 is record breaking, but they're
16· · very misleading to the public.
17· · · · · · And I believe he thinks he's smarter
18· · than the public, and I see the public
19· · realizes this and that's why the stock is
20· · trading, you know, at $2 and 2 and a half, in
21· · my opinion.
22· · · · · · · ·MR. ISSER:· Let's take a
23· · · · ·five-minute break and come back at
24· · · · ·3:30.
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·1· · · · · · · · · ·Joseph Schnaier
·2· · · · ·taken.)
·3· · · · · · · ·MR. ISSER:· On the record,
·4· · · · ·plaintiff's counsel and I have spoken
·5· · · · ·and because it's 3:30 and I will not
·6· · · · ·be finishing today we are going to
·7· · · · ·break for the day and schedule
·8· · · · ·another day to finish Mr. Schnaier's
·9· · · · ·deposition.· So we're concluding for
10· · · · ·the day.· And we will exchange dates.
11· · · · · · · ·Do you have anything you want
12· · · · ·to add on the record, Josh?
13· · · · · · · ·MR. WURTZEL:· No, that
14· · · · ·accurately states our discussion.
15
16· · · · · · · (Time noted 3:31 p.m.)
17
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20
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·1
·2· · · · · · · A C K N O W L E D G E M E N T
·3· ·STATE OF NEW YORK )
·4· · · · · · · · · · · · · · :ss
·5· ·COUNTY OF NEW YORK)
·6· · · I, JOSEPH SCHNAIER, hereby certify that I
·7· ·have read the transcript of my testimony taken
·8· ·under oath on SEPTEMBER 24, 2020, that the
·9· ·transcript is a true, complete and correct
10· ·record of what was asked, answered and said
11· ·during my testimony under oath, and that the
12· ·answers on the record as given by me are true
13· ·and correct.
14
15
16
17· ·____________________________
18· · · JOSEPH SCHNAIER
19
20· ·Signed and subscribed to
21· ·before me, this _____ day
22· ·of ____________, _______.
23
24· ·_________________________
25· ·Notary Public
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·1
·2· · · · · · · · · ·I N D E X
·3
· · ·EXAMINATION BY· · · · · · · · · · · · PAGE
·4
· · ·Mr. Isser· · · · · · · · · · · · · · · ·8
·5
·6· · · · · · · · ·E X H I B I T S
·7
· · ·DEFENDANTS'· · · ·DESCRIPTION· · · · · · ·PAGE
·8
· · · · ·1· · · · ·Financial industry
·9· · · · · · · · ·regulatory authority
· · · · · · · · · ·letter of acceptance,
10· · · · · · · · ·waiver and consent· · · · · ·21
11· · · ·2· · · · ·Hearing panel decision· · · ·54
12· · · ·3· · · · ·Complaint· · · · · · · · · · 91
13· · · ·4· · · · ·First amended complaint· · · 93
14· · · ·5· · · · ·Plaintiffs' responses and

· · · · · · · · · ·objectives to Defendant
15· · · · · · · · ·LiveXLive Media Inc.'s
· · · · · · · · · ·First Set of Interrogatories
16· · · · · · · · ·to each plaintiff· · · · · · 94
17· · · ·6· · · · ·Plaintiffs' response to

· · · · · · · · · ·document request· · · · · · ·96
18
· · · · ·7· · · · ·Wantickets' ownership
19· · · · · · · · ·structure· · · · · · · · · · 98
20· · · ·8· · · · ·Gideon Asset Management

· · · · · · · · · ·LLC letter· · · · · · · · · 114
21
· · · · ·9· · · · ·P&L Statement· · · · · · · ·129
22
· · · · 10· · · · ·P&L Statement· · · · · · · ·130
23
· · · · 11· · · · ·Draft membership interest
24· · · · · · · · ·purchase agreement· · · · · 141
25
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·1
·2· ·DEFENDANTS'· · · ·DESCRIPTION· · · · · · PAGE
·3· · · ·12· · · · Complaint· · · · · · · · · ·144
·4· · · ·13· · · · Letter from Danco

· · · · · · · · · ·Enterprises· · · · · · · · ·153
·5
· · · · ·14· · · · Letter dated 5/17/17· · · · 166
·6
· · · · ·15· · · · Letter dated 4/22/16· · · · 171
·7
· · · · ·16· · · · Amended complaint· · · · · ·174
·8
· · · · ·17· · · · E-mail chain· · · · · · · · 196
·9
· · · · ·18· · · · Asset purchase agreement· · 197
10
· · · · ·19· · · · Loton Corp. subscription
11· · · · · · · · ·agreement· · · · · · · · · ·198
12· · · ·20· · · · QA amended report· · · · · ·233
13· · · ·21· · · · E-mail exchange· · · · · · ·265
14
· · ·DOCUMENTS AND/OR
15· ·INFORMATION REQUESTED· · · · · · · · PAGE LINE
16· ·Documents regarding award and

· · ·payment of award· · · · · · · · · · · 109· ·8
17
· · ·Closing documents· · · · · · · · · · ·114· ·3
18
· · ·Documents regarding when Gamwant's
19· ·ownership interest in Wantickets
· · ·was transferred to you· · · · · · · · 137· 15
20
21
22
23
24
25
U.S. LEGAL SUPPORT

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09/24/2020 291
·1
·2· · · · · · · C E R T I F I C A T E
·3· ·STATE OF NEW YORK )

· · · · · · · · · · · ·)· ·SS:
·4· ·COUNTY OF ROCKLAND)
·5· · · I, MICHELLE LEMBERGER, a Notary Public
·6· ·within and for the State of New York, do
·7· ·hereby certify that the foregoing examination
·8· ·of JOSEPH SCHNAIER was taken before me on the
·9· ·7th day of October, 2020.
10· · · The said witness was by me duly sworn
11· ·before the commencement of their testimony.
12· ·The said testimony was taken stenographically
13· ·by myself and then transcribed.
14· · · The within transcript is a true record of
15· ·the said testimony.
16· · · I am not connected by blood or marriage
17· ·with any of the said parties, nor interested
18· ·directly or indirectly in the matter in
19· ·controversy, nor am I in the employ of any of
20· ·the counsel.
21
22· · · ___________________________
23· · · · · ·MICHELLE LEMBERGER
24
25
U.S. LEGAL SUPPORT

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09/24/2020 292
·1
·2· · · · · · · DEPOSITION ERRATA SHEET
·3· ·Case Caption:· Danco Enterprises v. LiveXLive
·4· ·Media
·5
·6· · · · · DECLARATION UNDER PENALTY OF PERJURY
·7· · · · · ·I declare under penalty of perjury
·8· ·that I have read the entire transcript of my
·9· ·Deposition taken in the captioned matter or
10· ·the same has been read to me, and the same is
11· ·true and accurate, save and except for changes
12· ·and/or corrections, if any, as indicated by me
13· ·on the DEPOSITION ERRATA SHEET hereof, with
14· ·the understanding that I offer these changes
15· ·as if still under oath.
16
17· · · · · ·_____________________________________
18· · · · · · · JOSEPH SCHNAIER
19
20· ·Subscribed and sworn to on the _____ day of
21· ·____________, 2020, before me,
22· ·___________________________________________
23· ·Notary Public,
24· ·in and for the State of ___________________
25
U.S. LEGAL SUPPORT

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09/24/2020 293
·1
·3· ·Page No. ____ Line No. ____ Change to: ____
·4· ·___________________________________________
·5· ·Reason for change: ________________________
·7· ·___________________________________________
10· ·___________________________________________
11· ·Reason for change: ________________________
12· ·Page No. ____ Line No. ____ Change to: ____
13· ·___________________________________________
16· ·___________________________________________
19· ·___________________________________________
22· ·___________________________________________
24· ·SIGNATURE:____________________DATE:________
U.S. LEGAL SUPPORT

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·1
·4· ·___________________________________________
·7· ·___________________________________________
10· ·___________________________________________
13· ·___________________________________________
16· ·___________________________________________
19· ·___________________________________________
22· ·___________________________________________
24· ·SIGNATURE:____________________DATE:________
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 1
EX Def- $4,800,000 141:25
Exhibits 0016 Joseph Schnaier 0924 $4.8 146:4
20 175:3 $5 162:23 199:23 200:7,9,12
EX Def- EX Def- 208:8,16,25 261:25 262:5,
0001 Joseph Schnaier 0924 0017 Joseph Schnaier 0924 12,16 263:9,11 264:2
20 21:10 55:8,12,16,23 20 196:6 $5,280,000 142:7
EX Def- EX Def- $500 162:18 163:4 212:17
0002 Joseph Schnaier 0924 0018 Joseph Schnaier 0924 $77,000 53:12 54:24
20 54:16 55:9,12,14 59:8 20 197:14
112:19 236:6 EX Def-
0019 Joseph Schnaier 0924 (
EX Def-
0003 Joseph Schnaier 0924 20 198:16
EX Def- (g) 205:8
20 91:22,25 92:4
EX Def- 0020 Joseph Schnaier 0924
0004 Joseph Schnaier 0924 20 233:19 0
20 93:3,7 95:24 99:25 120:7 EX Def-
EX Def- 0021 Joseph Schnaier 0924 04 96:17
0005 Joseph Schnaier 0924 20 265:13 07 19:13
20 94:10,16
EX Def- $ 1
0006 Joseph Schnaier 0924
20 96:8 184:20 $1 286:15 1 21:10 55:8,12,16,23 91:20
EX Def- $1,250,000 152:2 145:16
0007 Joseph Schnaier 0924 $1.25 199:15 219:16 220:16 1,000 182:17
20 98:25 110:14 233:5,12 258:4 1.25 189:18 199:6,24 200:3
EX Def- $10 174:19 264:9 265:2 231:2 270:17
0008 Joseph Schnaier 0924 $100 156:7,14 158:24 10 20:5 41:4 92:16 117:14,
20 114:20,24 115:3 126:15 160:13,24 161:18 163:4 22 129:18 130:25 153:24
EX Def- 215:2 274:19,24 275:9,23 196:10 238:2
0009 Joseph Schnaier 0924 276:11,12,16,24 279:4,18 100 77:9 78:4 138:18 142:6
20 129:22 280:6 157:10 159:14 182:19,21
EX Def- $100,000 131:14 211:5 221:18,20 276:19
0010 Joseph Schnaier 0924 $100,303 132:19 278:15,24 280:8
20 130:25 $11,900,000 154:13 100-something 239:14
EX Def- $128 158:23 103 143:11
0011 Joseph Schnaier 0924 103,000 134:17,20 143:10
20 141:11 143:7 $13 110:23
$14 157:9 10:45 73:24
EX Def-
$150,000 117:23 130:11 10th 154:12
0012 Joseph Schnaier 0924
20 144:17 $16 143:9 11 130:21 131:8 141:11
$16,500,000 145:18 150:20 143:7
EX Def-
0013 Joseph Schnaier 0924 151:6 11/17/15 251:22
20 153:18 $2 286:20 11/24/2015 233:22
EX Def- $20 277:12 11566 7:13
0014 Joseph Schnaier 0924 $27,000 186:25 12 44:6 45:14 139:24 141:7
20 166:8 $3.33 199:18 200:5,14,15 144:17 157:9 158:22 161:2
EX Def- $300,000 115:20,25 116:23 266:13 282:3
0015 Joseph Schnaier 0924 117:11,17 118:10,18 120 276:19
20 171:6 119:22,25 124 236:2,7,8,13,21,24
$4 157:18 167:14,24 168:9 237:5,12 238:5,12,14,21
172:12 240:2
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 2
125 157:10 237:6 2001 38:23 25 19:24 23:11,16 33:22
125,000 199:3 2006 19:12 41:3,8,10 43:15 34:4,9 121:7 122:16 123:10
12:30 168:13 56:10 250,000 115:21 199:2
12:32 168:16 2007 19:12 46:15 47:12 26 186:20 187:2,4 189:4
13 99:13 105:10 110:24 56:10 75:24 103:4 252:25
140:19 144:14 153:11,18 2008 43:15 27 189:4
158:22 172:16 2010 120:14 122:25 28 131:21
14 153:14,21 158:22 161:2 2014 75:12 98:16 99:13 29 190:14
166:8 104:20,23 115:5 116:4 2:15 223:2
15 16:23 72:22 127:17,21 119:5,6 121:21 122:11 2:32 236:10
157:18 158:22 166:3 171:6 124:2,8 129:4,12 130:2,12 2:33 237:7
238:2 131:22 132:18 133:17 2:34 237:10
150,000 118:9 134:10,19 135:5 136:8
186:5 2:35 238:10
16 20:5 74:24 127:18,21 2:36 239:9
131:22,23 151:19 168:13 2015 74:24 104:15,20 119:3
127:16,25 130:3,12 131:5, 2:37 240:3
170:25 175:3
17 10:18 116:17 166:7,11 22,24 134:16 143:9 178:15
196:6 236:17 251:23 190:4 194:4 224:21 228:7, 3
18 196:2 197:14 16 229:12 230:19 232:21
234:12 236:17 240:22 242:3 3 91:22,25 92:4 95:2,5,9
180 116:15 247:22 251:23 258:6 159:5 205:5
18th 154:16 2016 75:12 99:14 103:17,19, 30 90:12 134:23 249:17
19 197:10 198:16 20 121:6,9,10,11,17,18,22 300 119:21 156:8,20
1975 10:18 122:9,11,15,20 123:10 31 100:3,4,12,19 101:4
1991 186:21 124:3,8,22 125:4 126:2
33 102:22 103:7 120:6,13,19
1995 21:25 23:5,10 41:3,8 127:16 129:4,6 131:6,24
136:14 138:9 139:14 143:9 35 104:14
1996 12:14 20:8,9
144:13 145:8 146:13,20,25 36 121:3,15 122:5
1999 102:18 136:7
147:13,17,21 148:4,21 37 174:22
1st 173:11
165:2,16 170:18 171:5,11, 375 199:15
21 173:11,23 174:5 175:18, 375,000 199:25 200:4,16
2 20 200:21 201:3,5,8 242:14 38 174:24 184:11 185:18
243:12,14 244:4,7,17 245:7 186:5
2 54:16 55:9,12,14 59:8 93:2 246:17 247:25 248:20 39 37:21 38:9,12,24 39:6
100:14,16 112:19 120:10,12 252:20 253:2 260:16 261:15 40:20 183:17 185:15,16,19,
145:18 184:20 185:13 262:13 263:8 266:13 20
186:18,19 192:17 194:3 2016/2017 244:11
205:4,7,8 236:6 286:20 39th 38:8
2017 83:18 166:7 176:4 3:18 282:5
2(f) 201:19,25 228:17 242:15 243:12,15
2(g)(h) 282:9 3:30 286:24 287:5
244:4,8,9,17 245:8 246:17,
2(g)(iv) 280:17 23 247:25 248:2,4,6,21 3:31 287:16
2(g)(v) 281:13 2018 92:16 93:16 145:22 3s 200:10
2(h) 281:23 153:23,24 196:10
2,050,000 115:23 2020 288:8 4
20 16:20 20:10 25:11 62:12 20th 146:19
121:7 122:15 123:10 21 233:15 265:13 4 93:3,7 94:8 95:24 96:15,16
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159:10 198:9 210:7 233:19 151:19 156:13
22 171:5,11,21 173:11 174:5
280:15 252:20 4.8 142:6
200 286:4 23 93:16 175:17 40 120:14,22 122:25 123:9
200,000 171:17 172:7 24 20:9 175:20 288:8 400 157:19 159:5 162:23
176:17
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 3
41 127:22 224:15,16,18 206:18,21 220:18,19
44 232:18,24 9 accurately 99:12 287:14
45 10:16 120:15 240:21 accused 128:18
47 252:19 9 116:21 117:7 119:16 achieve 46:17
4s 96:16 129:22 acknowledge 281:12
4th 248:21 249:11 9/11 38:18,19 acknowledges 116:22
9/30/2015 233:24 acknowledging 281:10
5 90 64:17 137:25 138:9 139:5 acquire 111:2 140:15 141:22
140:15 147:19 148:10 144:10 145:15,25 146:5
5 94:10,16 98:20 110:13 90-day 53:12 146:15 148:3,8 151:5 165:15,19
126:16 139:16 153:23 90s 64:18 280:24
157:17 172:20 228:17 9216 52:16 acquired 103:11 109:17
248:2,5 93 11:11 12:9 124:20,23 129:6 132:23
50 182:23 94 138:2 134:5 137:24 143:14 144:5
500 156:13 159:12 95 46:18 151:22 174:10,11 176:13
500,000 120:16,23 136:10 201:13 227:22 228:2
96 46:18
182:14,15 acquiring 129:14 173:12
97 187:20,25 188:2 177:17 202:2 211:22 213:16
54 192:12,14,15,20
221:2
55 192:14,22
A acquisition 44:7 107:18,19
5th 154:5 111:3 121:21 147:3,6 152:3
a.m. 73:24 155:16 210:3 247:10 251:6,
6 abilities 61:14 12,15 285:13,23
ability 97:19 205:14 206:11 acquisitions 163:9 214:5,24
6 96:8 114:11,17 115:3,19 above-mentioned 21:6 act 126:23 149:13 218:2
126:16 139:4 145:7 184:20 54:14 91:24 93:5 94:12 96:6 220:15,20,21
63 46:9,22 265:9 266:11 98:23 114:22 129:20 130:23 acted 17:3
67 54:12 79:8,16 141:9 144:16 153:16 166:6 acting 57:23 61:2 281:16
68 20:22,23 21:2 41:2 52:10, 171:4 175:2 196:4 197:12 action 93:11 144:20
15 55:6,24 198:14 233:17 265:11 actions 52:24
Absent 8:20 actual 45:4 228:3 229:4
7 accept 57:6 252:3 257:5 278:2
acceptance 21:8,15 22:7 add 46:2 287:12
7 46:8,17 47:7,25 98:25 52:18 55:13,18 addition 9:20 112:18
110:14 116:13 145:11 accepted 52:23 additional 116:17 280:20
75 276:19 accepting 229:13 address 7:11
75,000 200:20 access 97:15 238:7 adequate 205:16 206:13
77,000 49:20 accommodate 10:10 administrative 53:20 54:4,8
7th 154:8 account 128:11 153:7 admonish 15:18
accredited 202:4,21 204:10, advice 282:14
12,16 207:8,12,17 219:9,14
8 advised 97:11 154:5,6,13
220:7,12 233:9
advisement 109:13 114:7
8 114:20,24 115:3,5 119:3 accuracy 132:11 157:22
137:18
126:15 146:11 158:4,6,9
advisory 259:11 260:7
80 48:25 accurate 19:24 22:3,9,11,12,
16,18,24 41:5 75:12 92:20, afar 75:11,12 76:6,8,15,18
84 138:5,21 139:13 141:22 263:22
22,23,25 93:20,22,23,25
142:5 affiliate 282:18
94:5,7 95:20 99:22 103:7
111:16 121:8 130:8,14 affiliates 98:6 206:7 282:11
131:11,23,25 147:20 148:11 age 51:17
200:16 202:6 205:20
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 4
agency 232:14 amendment 175:10 article 192:8,9,22 194:2,3,5,
agent 145:9 282:18 amount 116:23 139:18 12,16,19 195:3,10
aggressive 193:7,10 154:24 159:7 asks 217:23 252:14
agree 8:12 164:10 174:13,18 analysis 32:13 33:24 asset 80:3,18 83:19 102:7,
242:3 252:4 276:15 281:19 analyzed 82:6 11 114:23 115:4,13 135:20
agreed 8:15 9:10 146:12 Andy 169:10,11 189:6,11 191:17 197:13,17
147:9,18 148:17 149:2,18 Angeles 183:11 185:24 214:9 216:11,21 218:4,13
150:25 165:19,22 announced 253:3,7,11,16 228:6 248:22 262:22 273:12
agreeing 78:9 149:19 274:12
announcement 245:14,18
164:13 assets 119:10 198:2 211:18,
announcements 163:8 22,24 213:15,18 219:18
agreement 80:4,19 83:19 254:17
102:8 108:11 111:23,24 220:17 233:13 234:3,4
announcing 162:12,13 235:19 261:5,12
115:12,15 119:12 135:20 annual 115:20 120:17
138:4 141:11,21,23 150:17 Associates 36:7,9,12 37:2,
189:6,12 191:17 197:13,18 answering 159:18,24 164:16 6,9,19 40:20
198:11,15 200:12 201:20 213:4,8 275:5 assume 27:3 75:11 81:12
202:14,16 203:11 204:20 answers 9:15,17,20 65:20 114:19 222:19 232:22 247:3
205:5,21 206:11,19 207:9, 76:22 77:6 78:3 164:23 249:5,21 251:23
13,15 210:19,25 211:10,20 281:15,20 288:12 assumed 31:16 49:16
212:7,12,20 213:14 216:11, anticipated 146:22 160:24 assuming 57:4 194:8 196:25
21 218:4,13 228:7 230:13, antidepressant 51:21 197:2 231:19 250:18
20 248:23 262:23 270:11,17 anymore 38:22 assumption 113:23 268:15
271:6,13 273:11,13 274:13 APA 125:17,22 157:2 192:5 Attached 154:12
280:16 281:25 282:3 283:5, 227:15 228:9,15,17 244:6,7 attack 38:21
6,10,19 284:2 245:17 246:24 248:2 257:11 attempting 145:12
agreements 113:14 126:19 273:6 274:5 278:25
136:18 137:3 198:10,12,20 attend 11:12 169:18
apologize 67:4 96:16,17
199:2,7 201:6 209:10 attended 260:18
apparent 257:8
ahead 18:25 57:19 87:11 attention 52:14
appealing 253:13,14
275:4 attorney 50:4 89:21 160:3,8
appearance 56:9 197:8 217:23
alcohol-related 190:16 application 48:6
Alex 260:19 attorney-client 191:8
apply 48:5 attorneys 196:20,21 197:2,5
allegation 246:13 247:16 approach 105:21
allegations 87:19 88:11 256:3
approached 145:8 186:9 August 266:13
92:19 93:20 175:25 189:3
approximate 125:15 authority 21:8,14 54:20
192:2 195:8 218:10 256:22
approximately 12:13,14 126:23 148:24 149:13,22
allege 120:6,14 121:4 136:9
23:11 90:12 105:10 121:7 authorized 176:3
186:21 190:15 246:17
122:15 award 108:17,18,21,22
alleged 52:20 53:23 59:12
April 92:16 145:24 146:19 109:3,10,11 111:6 112:2,13,
189:10
164:25 165:16 171:5,11,21 14
alleging 212:6,9 173:11 174:5 175:20 196:10
allowed 77:5 78:2 173:6,16 aware 15:7 42:14,17 97:20
arbitration 49:17 108:16,17 176:16 179:18 191:25
272:23 273:4
arbitrators 108:20 111:24 192:2,4 194:4,7 273:22
alpha 192:9
argue 65:24 274:6
amended 93:6,11 100:2,13
arm 141:4 AWC 52:22
120:7,8,11 127:22 175:2,6
183:24 184:10,12,16,19,25 arranged 224:23 231:12
185:4,9 187:3 192:8,17 arrangements 225:4 B
224:15 232:18 233:18,21 arranging 224:24 225:7,13
236:5,6,19,21,23 237:13,15 228:14,24 231:6,8,13,17,18 back 34:25 40:25 47:11,12,
239:23 arrested 190:15 18 48:2,7,14,22 49:4,13
50:6,24 51:3 52:15 56:25
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 5
57:2,7 59:6 64:17 71:15 277:4 bringing 259:23
72:23 73:22,25 74:8 79:7 bigger 102:2 Broad 48:25
80:24 128:24 135:23 140:9 billionaire 214:22 Broadway 37:21 38:10,13,
148:10 152:13 162:22,23 bio 33:6,9 81:4,5,6,9,13,14, 24 39:6 40:20
168:18 176:14 219:8 223:2 15 194:16 broke 174:15
224:14 240:19 248:19 255:4 biography 20:16 broken 285:11
256:5 284:22 286:23
bios 32:25 33:2,11 broker 12:21,22,25 13:4,9,
background 21:23 22:5,6 18,24,25 14:20 15:22 16:5,
41:2 bit 133:3 134:21 193:4 204:8
bite 71:15 8,16 17:3 19:9,11 20:3,4
bad 69:25 70:5,6,11,14 71:2 23:9,21 24:8 36:10 37:2,3,8
79:23 82:15 110:7,19 Blakely 86:14,20,23 87:6
235:16,20 38:14,15,24 41:7,13 42:7,9,
194:12,19,25 240:7 13 43:5,12,15 57:24 82:12
ballpark 36:18 Blakely's 87:8
107:16 187:21,22 188:22
ban 58:24 59:7 blast 30:12 189:23 190:2,8 223:16
bank 157:6,12 158:25 159:3 blessing 259:24 277:15
160:13,15 162:14,16 214:11 blockbuster 286:2 broker/dealer 48:5,8
273:3,16,22,25 274:3,7,14, blocks 38:19 brokerage 12:2,3 223:7,13
17 275:2,7,16,17,21 276:10, blue 85:16,23 224:3,4 277:16
22 279:3,11,17 blur 202:25 Brooklyn 10:20,22 11:7,15
banker 57:13 111:4 blurred 203:2,5,6,7 brother 65:4
bankers 277:24,25 blurry 205:12 206:4 281:7 brought 49:16 51:14 65:12
banks 276:23 Bo 196:9,10,16,24 106:16 107:10 168:21,24
Barak 103:12,18 104:12,19 board 221:5 259:12 260:7 204:10 253:9
122:2 126:19 boilerplate 281:6 build 124:12
barely 159:14 borderline 210:13 building 141:5
base 188:13 born 10:17,19 bullet 242:12 246:14 249:22
based 52:25 71:16 81:7,21 borrower 151:21,23,25 250:3 255:18
88:19,23 120:24,25 140:23 bottom 99:14 166:23 203:3 bunch 123:18 225:22,23
157:4 208:14,16,20,23 238:9 267:3 business 11:18 24:19 44:24
263:17 97:21,24 98:10 123:23
bought 62:23 63:4,6,9
basis 200:10,14 104:17 119:2,6 136:15 124:2,8,12 133:14 142:24
basketball 259:16 151:7 143:3,4,10 159:16 178:9
Bass 214:15 263:3 264:8,12, bounce 152:25 226:3 233:13 234:8 247:9
25 265:16 266:12 267:4,8, bounced 152:19 153:3 254:11 271:9,15
11,17,24 268:5,24 154:17 buy 48:18 51:19 63:10
Bates 114:12 branch 223:12,13,16,22 104:18 145:13 171:17
bathroom 284:16 224:5,7 277:15 172:13 173:6 183:3
bear 205:14 206:11 207:3 branches 224:3 buying 57:14 62:7 63:3,11
began 76:18 81:24 119:4 149:7,9 211:22 266:3
Brands 252:22 253:3,7,11,
begin 7:19 9:24 16,22
beginning 52:16 127:18,21, break 10:9,10,13,14 72:21, C
24 181:4 218:15 224:20 23 73:16 74:4 76:23 77:8,20
behalf 126:24 186:24 198:8 168:14 222:25 234:20,22 call 28:21 38:12 49:18
281:16 235:4,12 280:13 284:12 53:18,21,22 58:5 63:25
belief 122:10 285:2 286:23 287:7 65:6,25 66:13 85:3 90:5,21
believed 211:4 275:22 breaking 285:9 286:13,14, 137:15 182:24,25
276:4,6 15 called 30:17 65:13 85:2
believing 215:9 276:16 breaks 10:11 74:7 183:20
bi-weekly 115:21 bridge 267:4,9,12,23 calling 30:13
big 141:4 213:19,21,22 bring 52:24 259:20 calls 15:13,17 142:15 162:4
214:5,13 225:21 265:6 216:15
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 6
camera 7:5 Chehabar 105:18 116:23 code 52:17
Canada 123:5,15,16 117:5 118:9 119:17 126:9 coffee 236:10
Canadian 123:17 175:18 Cohen 166:12,19,25 167:6,8
candid 149:24 Chehabars 105:24 142:12 college 10:25 11:12,14,15,
cap 272:17 273:14 149:6,9 150:2,18 174:13,17, 22 12:9,12
capacity 24:8 19 177:5 combative 72:12
capital 64:25 65:11 261:24 China 252:22 253:3,6,11,16, comfortable 209:20
22 Commission 15:10,24 17:5
card 169:19,23
choice 204:17 233:23
cares 229:11
choose 101:16 Commission's 195:22
Carla 91:17,18
chose 101:12 commit 277:25
Carlin 126:19 171:10
circumstances 173:6 commitments 155:15
case 7:25 9:3 27:13 49:20 267:14,15
51:24 55:22 112:15,16 210:20
113:19 194:24 218:9 246:11 claim 84:23 158:10 215:7, committed 275:9 276:9
276:11 15,19 218:22 222:2 242:18 278:5,21 279:18
254:24 255:20 258:2,7 committing 278:24 279:3
cashed 153:8,10 260:8 261:23 270:13 284:6
categories 202:23 204:14 communicate 77:19 181:6,
claimed 108:9 12 182:5,8,12,15
category 202:24 204:14 claiming 247:23 254:16
caused 190:12 communicated 75:7 181:24
276:22 282:25 197:5
caveat 89:6 claims 122:5
Center 41:11 communicating 181:9
clean 218:23 communication 191:9
CEO 121:5,8,16,18 122:6,9 cleanup 123:4
124:22 134:3,5 135:14 communications 77:16
clear 16:14 35:4 57:8 79:15 companies 14:11,22 15:8,23
158:14,17 166:16 170:18 84:22 88:4 102:7 110:22
175:14 217:20 222:18 16:10 17:4,13,21 23:17
119:15 140:5,10 151:18 26:19,21 27:2,7,13 31:2
235:21 160:21 170:8 172:12 179:6
certify 288:6 34:9,17 44:10,18 45:2,10,17
184:24 192:3 231:21 57:24 58:11,15,22 60:6
cetera 83:2 84:20 client 17:22 24:10 25:4 35:4
CFO 84:18 157:5 279:6 63:24 64:3,4,7 67:7 100:24
239:16 101:8,14,17 139:7 170:19
chain 196:5 266:21 client's 16:6,8 173:17 207:21 220:25
chairman 158:14,17 222:18 client-counsel 191:15 224:3,4 277:14 279:8
255:8 276:18,21 clients 14:5,23 16:11 17:7 companies' 45:6
change 256:5 23:20 37:13,15 48:18 company 18:14,22 24:6
changed 159:15 101:24 102:2,5 25:21 26:10 27:25 28:10,21
characterization 152:25 clock 66:4 29:2,6 30:9 32:4 34:21
172:25 199:21 216:14 close 270:2,5 35:16 48:10 56:16 59:10
charge 139:7 167:7 closed 84:17 148:4 227:14 60:12,18,25 61:5,7,15,21
charged 210:9,12 263:12 244:21 257:10 268:14,16,17 62:2,6,17 63:19,20 64:20
264:2 269:20,23 273:24 274:5 66:8 67:12,18,19 82:25
cheaper 263:16 264:3 closing 113:17,18,25 155:16 98:13 104:10 107:11
cheat 209:18 246:7 110:11,15 126:12 128:19
cheated 257:22 clothing 143:5 129:9 136:24 137:4 140:8,
club 169:22 234:18 24 142:7 143:23 145:15,16,
check 153:6,8,9 154:12,17
17 146:6 150:22 151:6,22,
187:21,23 188:22 189:23 clubs 169:18 250:6,10,21 24 152:4 156:4,16,21
190:2,8 204:25 215:14 co-president 122:19 125:10, 158:15,18 159:11 160:12
227:9 232:7 233:3 244:10 23 129:14 130:13 132:2,6 162:13 163:4,6 168:22,25
249:24 134:4,9 148:22 150:5 170:21 176:14 183:4,18
checked 232:5 235:16 171:20 201:21 202:2,9 205:19
checks 152:19 153:4 Coachella 225:22 206:7,17 207:3,7,15,17,23
208:15 209:15,20 210:4,8,
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 7
14,17 211:3,11,24 212:8,12, confer 195:18 196:21 conversations 89:12 154:21
17,21 213:12,13,17 214:3,8, conferring 196:14,17 177:14 181:4
22,24 215:8 217:5 220:11 confidential 7:23 8:4,17,22 convertible 267:18 268:10
221:4 222:17,19 223:19 confidentiality 7:24 converts 268:12
233:11 235:8 241:21 255:9, confirm 157:22 158:4,6,9 copy 240:22 281:25
23 256:11,12 257:6 258:5 159:21 215:18 core 143:4
260:6,24 265:8 276:21
280:22,23 281:15 282:11, confirmed 208:22 Corp 64:2,10,12 65:14
17,19,22 283:12 285:15 confirming 279:23,25 280:3, 146:10 198:15,20 233:22
company's 25:17 5 corporate 31:5 169:23
comparing 285:21 confused 186:17 corporation 56:11
competitors 141:6 confusing 138:6 correct 8:19 11:21 18:17
connection 52:11 56:9 23:11 27:4 36:7 43:6,11
complaining 85:10 52:12 53:25 54:21,24 55:2
107:19 108:4 109:22 111:8,
complaint 87:19 88:12 10 117:24 119:9 56:13 59:10,11 71:18 75:3,
91:25 92:9,11 93:6,11 4,18 76:11,13 78:19 79:5,
100:2,13 102:23 120:7,8,11 Connective 65:14
consent 21:9,15 22:7 52:19 11,18 81:13,14 82:8 92:12
121:4 122:4,14 136:9 95:5 97:21,22 98:17,18
144:17,20 151:12 155:10 55:18
consideration 53:14 110:25 99:17,19 101:10,11,14,15
173:22,24 175:2,6,11 176:3, 102:10 104:6,7,24,25 107:2,
10,11,12,13,18 183:17,23, 141:24 146:9 167:14
3 115:13 117:11,20 119:11,
24 184:9,10,13,16,20,25 considerations 282:12 18 123:2,3 124:24 129:7,8,
185:4,9 186:19,20 187:3,14, considered 64:5,11 10,11 131:15 132:3 133:6,
18 189:5,11 190:15,20 consist 152:2 217:14 22 134:6,7,10,11,15,17
192:9 224:15 232:19 235:25 consistency 236:25 136:2,10,16,17,22,24,25
236:5,6,19,21,23 237:13,16, consumer 226:18 138:10,16,17,19,22,23
20 238:3 239:23 240:9,15, 139:2,7,8 142:8,13,22
consummation 119:9
21 244:25 246:14 252:19 143:10 145:5,6 147:4,7,11
255:19 256:23 284:7 contained 95:19 100:18
189:10 148:4,5 151:16,17 152:6,20
complaints 127:22 153:8 154:18 156:2 166:17,
contemplating 151:21
complete 145:13 147:20 20 167:8,9 168:20 169:15
269:10 288:9 content 77:8 250:6
171:18,24,25 172:4 173:23
completed 145:25 242:4 context 82:7 84:25 85:22 175:12 176:4 180:23 184:8
completely 38:5 contingencies 205:17 185:5 186:4 192:3,18,19,21
206:15 198:3,4,6,7 199:4,7,12,13,
complies 7:6
continue 51:11 123:22 16,17,22 202:4 207:4
Compound 215:21
164:11 193:21 208:17 212:8 219:9 223:15
comps 279:13
continued 121:5 122:14 236:17 240:9 241:8 244:6
computer 49:2 128:10 124:2 252:16 255:9,13,18 258:20,
239:8,9 25 262:22 266:2 267:4
continues 284:7
concept 203:22 268:11 273:24 274:5,25
contract 128:16 229:19,22
concern 55:19 281:5,18,20 283:3,12 288:9,
contracts 137:2 249:12
concerns 24:9 55:7,8,13 13
contribute 111:3
59:9 correctly 19:14 99:20 149:6
contributed 106:19
concerts 250:7 cost 200:10,14
contributing 111:12
concluding 287:9 counsel 9:10 68:4 69:6,8
control 139:7
conclusion 15:14,18,21 76:21 77:17,19 88:10,21,25
108:14 140:16 216:16 controlled 81:16 129:9
89:4,11 90:3,6,20 97:6,11
220:11
condition 52:23 129:3,16 166:20 191:5,12,16 234:20
conversation 84:22 85:4,5, 287:4
conditions 281:17
11 90:11 127:14 147:25
conduct 56:4,7 country 100:7
179:22 185:25 248:25
conducted 9:8 279:6,9 COUNTY 288:5
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 8
couple 39:13 49:21 58:13 162:10,12,13,17,18 163:2 deemed 8:4
217:16 286:8 214:7 253:7,11,17 257:22 deep 142:25
court 9:6,16,25 50:22 74:6 269:25 276:13 287:7,8,10 deeper 254:7,9
78:12 114:18 164:8 171:9 288:21 default 152:12
courting 71:23 days 116:15 147:19 148:10 defaulted 152:16
cover 97:17 159:13 249:17 273:24 Defendant 94:14 145:8,11,
crap 170:4 274:12 14
crazy 286:4 dead 277:8,9 defendants 7:21 9:3 94:16
created 285:25 deal 57:5 65:12 69:11,19,20 defendants' 21:9 54:15
credit 169:19,23 174:14,20 71:6,12,17,22 75:2,13,23 91:25 93:7 94:22 95:10
76:3,4 78:19 79:4 81:25 96:2,8 98:25 114:24 129:22
credits 11:14 82:7 111:22 146:10,12,21
criticism 61:13 130:25 141:11 144:17
147:8,17 148:9,18,25 153:18 166:8 171:6 175:3
cross 8:9 149:18,20,23 150:19,25
cross-examination 283:21 196:5 197:14 198:16 233:18
157:11 159:3 162:16 165:8, 265:12
CRV 40:5,7 25 168:19,20,23 169:3,8
170:20 172:11 177:10,24 defensive 257:20
cup 236:9
178:11 179:8,19,20 180:2,4, define 207:20 209:5
cure 239:21
10,21,23 181:3,8,10,21 defined 126:18
curiosity 155:13
182:10 186:8,10 190:9,19 definition 60:10 202:20
curious 46:3 204:9,11 216:17
191:22 195:6,7,11 212:2
current 7:11 205:17 206:14 214:19 215:2 232:17 defraud 207:6 254:15
221:21 250:17,23 252:22 253:21 256:18 284:7
customer 102:14 186:24 258:17 273:24 275:9 276:19 defrauded 82:24 155:4,8,17
cut 158:7 212:3 277:23 278:3,4,6,8,12,15, 190:19 206:24 218:19,22
cutting 211:7 213:7 17,20,21 279:15,19 280:6 234:19 254:8 257:23
dealer 62:10 degree 11:2,20
D dealing 68:8 258:23 delivered 127:23 224:20
dealings 69:22 demands 96:19
damaged 49:3 deals 19:16,18 43:19,20,21 dementia 51:22
Dan 65:7 44:3,5 66:6 67:5,14,16,20 demonstrate 268:4
Danco 98:2 138:15,19,21 76:2 151:10 210:22 215:15 Depending 135:15
139:5,11 144:21 145:14 219:12 245:3 246:19 247:4
depends 19:25 245:22
151:16 153:17,22 154:7,13, 263:15 277:24
277:23 278:3
14 198:8,23 debt 118:18,19 119:16,21,25
depose 160:3
Danny 169:12 266:8
deposited 154:15,23
database 128:10 debts 118:12,17 119:22
deposition 7:22 8:2,15 9:7,
date 13:2,10 16:25 41:19 deceived 257:10,23
9,14 65:22 72:19 73:14
116:15 125:14,15,24 126:4 decent 221:9 77:7,20 87:8 89:13,17 90:2,
127:19 176:19 180:17,18 decide 208:7 7,15 164:12,15 183:25
188:25 189:15 201:11 decided 112:15,20,25 113:5 214:17 275:18 278:9,22
229:10 259:9 261:13 280:20 144:3 175:19 255:7 287:9
dated 115:5 119:3 153:23 deciding 265:2 describe 13:23 98:10
166:7,11 171:5,11 194:3 decision 52:4,5 54:15,23 describes 100:24
196:10 251:22 266:13 55:15,17 59:9 79:17 112:18 deserving 108:12
dates 20:18 39:20 99:22 167:8 177:9,13,20 218:16 designate 8:9
125:25 165:5 173:14 287:10 decreased 129:3
daughter 57:18 87:10 designating 7:21
decreasing 123:21 details 242:4
David 83:11,14 90:24,25 dedesignate 8:12,18
266:12 267:6 determination 25:3 32:16
dedesignation 8:21 determine 15:24 24:11
day 36:16 72:15 73:3,9,19 deejay 259:15,17
116:14 157:25 159:12 32:14 35:2 140:21 157:3
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 9
168:5 209:10 235:17 253:20 discussing 75:6 76:10,15,19 148:7,15,16 152:13,20
263:8 78:19,24 81:25 97:20 154:22,24 155:6,10,14,21,
determined 139:18 140:7 141:22 147:9 190:9 195:9 22 173:21
142:19 260:22,23 261:10 263:23 due 45:4 56:24 80:13 82:13
develop 78:18,24 268:5 103:10 121:2 157:7 194:14
developed 78:17 discussion 73:12,18 89:17 209:2,5,8,14 215:6,17
Diego 104:12 126:19 171:10 287:14 216:5,9,14 217:5,13 218:2,7
Dietl 196:9,10,16 discussions 88:20,24 219:15 220:15,21 221:12
147:14 165:2,6,12 173:10 256:9,13,14,16 257:21
difference 110:6 276:14,15 262:22
differences 104:2 disgust 52:13
disgusted 49:25 50:7,11 dug 254:9
differentiated 141:6 DUI 190:21 192:2,4 195:9
52:2 57:2
difficult 61:18 229:17 duly 7:15
disheartening 214:10
dig 254:7 duties 14:20 40:16
dispute 117:16 132:10
digital 251:4 147:16
diligence 45:4 80:13 82:13 disputing 117:18,21
103:10 121:2 157:7 194:14 E
209:3,6,9,14 215:7,18 distance 71:9
216:5,9,15 217:5,13 218:2,7 divulging 191:8 e-mail 28:21 128:11,17
219:15 220:15,21 221:12 doc 267:9,12 269:24 196:5,8,9 224:22 228:25
256:10,13,14,16 257:21 docs 267:4 229:8 230:8,15,16 232:9
262:22 document 21:12,16,20 237:15 239:4,16 265:12,20
diluted 162:21 54:18 55:2 59:16 79:18 266:12,14,20,22 276:19,20
87:10 92:5,15,20 93:12,20 278:6,14 279:23,24,25
dinners 71:11 76:16
95:5,7,14 96:3,7,11,19,22 e-mailed 158:16 243:21,22,
direct 283:20 23 252:20 253:2
directly 27:25 28:2 31:3 66:7 99:4,8,20 115:6 117:19
130:4,6,7,10 131:9,13 e-mails 97:16 157:5 162:15
67:6,9 138:12 207:8 223:7 222:10,21,22 230:23
276:21 133:25 134:3 141:14,16,18
144:23 175:8,14 185:21 266:15,18,19,24 267:6
directors 201:22 221:5 193:22 197:19,21,25 198:5 earlier 78:23 80:12
disagree 200:6 203:2,22 205:11 239:11,14, earned 133:17
disagreed 108:16 17 240:9,12,25 241:4,11 easiest 164:10
disagreeing 126:7 documentation 48:22 easy 218:21,23,25 219:4
disagreement 112:8 126:11 221:25 264:10 273:3 255:16
disciplinary 55:7,9,14,20 documents 49:2,5 84:19 EB 175:7
disclose 77:15 218:14 90:14 97:6,14 109:9 113:7, economic 205:15 206:12
discount 142:25 12,17,19,25 114:14 137:7, 207:4 282:12
discover 189:5 216:18 13,16 198:19 203:21 215:11 education 10:24
218:12 252:23 262:19 222:7,9,13 239:8 257:3
268:20,24 271:8,15,21,23 Edwards 91:14
discovered 157:21 235:23 effort 277:24 279:15 280:25
272:4,5,9
discovery 262:17 efforts 278:4,8,12,16,18,19
Dolan 196:25
discuss 73:11 75:17 76:22 279:19
77:6 78:3 83:13 86:13,19 dollar 156:19
dollars 110:24 120:17,23 either/or 228:20
87:7 89:13,20 90:7 91:5,13 Ellin 9:5 64:15 65:12,16,23
183:13 186:9 217:22 224:16 134:23,24 136:10
doubt 181:15 182:22 66:7,10 67:5,10,17,21
241:10 259:4 261:4,5 68:17,25 69:8,16 70:16
discussed 40:17 68:3 72:2 download 239:2,18 71:4,5 74:15,17,22 75:2,6,7,
74:17,22 83:10 87:13,15,18 downloading 238:16,18 16 76:2 78:17,22 79:2,5,24
88:4,11 91:10,17 137:24 draft 141:10,15,19,23 80:2 82:16,20 92:10 128:3
165:9 181:22 182:10 183:7, driver's 45:21 143:21 155:8 160:16 168:20
23 184:14 185:2,3 186:14 Drovah 144:21 145:3,21 183:20 186:7,14,22 187:7
189:4 241:16 260:20 261:14 146:4,8,16,23 147:15,21 188:22 189:9 195:5,7,12,23
270:14,20,25
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 10
196:9 209:16 215:8,18 Eventbrite 165:3,4,15,18 existing 124:11
216:6,20 218:3 224:23 166:15,17 167:12,23 168:18 expect 163:23
225:3,6,11 228:13,23 171:10,16,17,18 172:3,7,8 expense 280:25
230:17,25 231:5,11,23 174:9 175:12,21 177:10,21 expenses 128:20
232:22 240:22 252:20 253:2 events 100:7 101:10 226:19, explain 22:17 26:23 43:7
254:24 255:7 257:2 258:2, 25 227:5,7,10,13,17,18,23 47:15 61:3 145:21 257:4
18 266:12 279:16 280:2 228:21,23 231:23 232:12,14
284:7 explained 54:10 145:12
244:13
Ellin's 81:14 127:23 183:18 explaining 53:9
eventually 104:4 108:2
194:16 215:16 216:9 explanation 239:20
everyone's 33:9 159:6
224:17,19 229:13 232:21 expressly 101:13
exact 11:10 13:2,10 16:25
240:24 254:16 20:17 125:14,24 187:10 extensive 225:5
employed 41:3 188:25 201:11 259:9 extent 128:2 135:16 137:18
employee 282:18 267:13,14 274:20 161:9 190:25 191:3 216:15
employees 102:25 120:15, examination 8:5,23 56:10 280:23
22 121:7 122:16,25 123:6,9, examined 7:17 extremely 162:14 179:23
10,16,18 222:23 286:11
Excellent 236:24 237:7
employment 126:18 exchange 14:16,21 15:4,10,
end 45:23 57:4 73:9,19 24 17:5,16,20 25:13,16 F
127:17,20 159:2 193:2 172:8 195:22 199:14 233:23
214:7 257:22 269:25 258:5 266:14 287:10 fact 53:5 71:3 89:16 112:12
ended 49:19 110:19 111:25 exchanged 265:12 123:25 209:14 214:16
139:5 156:19 157:18 178:4, exchanges 60:19 264:25
6 214:8 234:8 excited 143:22 factor 200:9
ending 110:7 233:24 exclude 69:5,7 88:17,25 facts 56:3,7 210:7
entered 148:2 175:21 191:5 factual 52:25
entering 140:14 207:14 exclusive 224:25 225:14 failed 56:12
Enterprises 138:15 144:22 231:14 failing 145:4 276:17
153:17,22 154:7 excuse 92:13 94:3 113:10 faith 112:11
entire 193:20 149:15 162:2 263:5 fall 200:21 201:7 202:24
entities 97:25 executed 271:5 falling 202:22 204:12
entitled 151:25 240:23 exercise 116:18 199:9 false 222:23
entity 92:9 206:10 219:13 exercised 200:2 familiar 28:19 198:21
equal 116:23 exhibit 20:22,23 21:4,10 families 179:20
equity 19:19 23:9 43:19,21 41:2 52:10 54:16 55:8,9,12, family 105:15,17,18 106:6,
62:13 147:7 149:7,10 14,16,23 59:8,24,25 79:8 15 175:19 177:11 178:4
151:20,25 266:9 268:12 91:22,25 92:4 93:3,7 94:10, 179:14 180:10 214:15
equivalent 167:14,24 16 95:24 96:8 98:25 99:25 263:4,16,18 264:5,8,12,14,
escapes 223:25 110:14 112:19 114:20,24 25 265:7,16 267:4,8,12,17,
estate 143:5 115:3 120:7 126:15 129:22 24 268:6,24
estimate 36:19 130:25 141:11 143:7 144:17 fan 259:25
evaluate 17:6,21 18:21 19:2 151:12,13 153:18 166:8 fantastic 236:25
33:17,24 34:3,10,16,20 171:6 175:3 184:20 186:25 fast 204:8
37:14 44:19 140:8 191:21 187:13,15,18 189:10 192:7,
father 72:4,11
14,22 196:5 197:14 198:16
evaluated 139:21 202:13,15 203:3,8,10,12,13, fault 155:9,14,20 156:11,12
evaluating 174:7 23 204:6 205:6 224:15 favorable 263:15
evaluation 31:25 32:9,11 233:19 235:25 236:5,6,7,23 February 126:2
Evenbrite's 174:4 237:4,6,12 238:13,14,19 fee 108:12 112:5,8 117:23
event 100:6 226:21 228:3 240:11 265:13 feel 68:19,22 184:19
229:5 exhibits 7:23 8:3,16 203:20 fees 109:22 110:3,7,10,12,
204:4 238:2 16 112:7,9,16
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 11
fell 131:21 204:15 112:6 206:25 258:21 266:10 71:20 80:6,22 81:19 82:4,10
felt 24:11 110:7,18,19 271:4 85:7 86:4 106:3 107:9 109:6
festival 246:9,12 fined 49:20 53:11 54:24 111:18 112:22 113:21
festivals 225:2,8,15,16,20, 186:24 258:18 118:16 120:3 122:8,23
24 228:12 229:9 231:23 finish 9:21 10:3 11:3,21,22 123:14 128:13 131:17
242:14,16,22 243:3,11,14 50:17 51:8,10 65:22 66:10 133:8,13 134:13 137:10
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finishing 287:6 208:19 212:23 215:21
figured 263:12 216:13,24 219:6,11,22,23
file 15:9 83:13 84:6,7,24 FINRA 21:24 42:14,15 221:16 222:16 242:24
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184:25 185:3 190:20 196:11 258:19
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273:23 274:2,4,8 275:15,24 fired 39:21 forward 177:9 201:4
278:12 firm 12:2,3 22:2 36:4,5 Foster 12:4,18 13:3,12,18
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filing 15:4 18:13,20 24:5 40:21 43:12 49:7 64:22
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25:14,16 83:23 183:24 186:22 187:8 193:22 210:9
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five-minute 73:15 74:3
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final 142:2 148:17 167:11 flag 254:20 fraudulently 274:23
finalized 146:14,21 147:2 flea 210:11 264:6 free 30:11 184:19 196:14
248:5 flip 143:16 144:3 145:13,16 Friedman 48:4
finally 10:8 146:6 147:10,20 148:9 friend 263:18,21,24 264:4
finance 111:22 150:19 152:6 friends 263:16
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41:11 48:3,16 49:5,6 54:19 flooding 48:24 full 49:19 115:24 154:14
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find 33:6,10 56:19 61:18 funds 48:7
137:21 179:20 188:5,9 forgot 37:22 38:10 46:2
185:2 207:23 223:24 future 52:24
193:16 218:8,21,25 237:17
238:12 239:10 253:25 forgotten 183:25 184:24
256:21 260:3 278:7 form 14:3,9 16:13 17:9,25 G
finder 168:23 169:7 18:24 20:14 22:20 23:13,18,
finding 222:21 238:16,18 23 24:14 27:11,18 29:14 game 64:20
30:20 34:7,13 35:11,25 37:5 gaming 46:3
findings 53:2 42:4 43:9,23 53:8 54:3 55:4
fine 50:5 63:13 66:20 70:10 Gamwant 104:17 113:8,13,
57:16 59:4,21 60:9 63:8 16 114:14 136:21 137:3
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 12
138:22 gross 131:21 112:18
Gamwant's 136:23 137:4 ground 9:13 held 45:19 47:5 138:25
Gary 214:13,17 grounds 162:6 helped 111:13
gather 97:14 group 102:25 104:13,16,23 helpful 259:12
gathered 97:6 105:5,8,14 111:2 113:15,16 helping 111:21
gave 34:23 47:11,17,18 114:15 124:13 Herb 51:15
56:25 59:5 97:15,19 112:24 grow 121:5 122:14 123:22 hereof 116:14,16 280:20
152:10 159:22 210:5 247:12 124:2,8 125:4 Hey 248:19
263:15 growing 122:24 123:11,24 hiding 218:17
general 21:24 57:14 124:17 128:24 140:24 286:3 high 11:5,6 12:8,10
generally 37:6 203:21 272:7 growth 286:4 highest 10:23 210:12
generating 120:15,16 guarantee 110:5,8 277:18 hired 111:4
gentleman 51:15 guaranteed 276:10 history 32:18,20,24 156:17
get all 160:8 guarantor 151:16 221:8,9
get along 103:14,18 guess 20:12 30:25 49:17 hold 15:12 34:6 46:10 47:2,7
Gideon 114:23 115:4,13 53:10,13,14 62:15 65:10 50:17 66:14 73:2 77:13 95:4
117:23 118:9 84:17 94:9 106:16 142:10, 109:5 140:2 158:2 161:8
girlfriend 71:12 14 156:23 176:5 226:9,22 172:23 185:20 219:22
give 9:12,15,19 10:3 27:7,9 231:18 256:4 273:21 286:15 248:10 269:8 272:12
31:3 36:18,21,22 47:24 guilty 186:22 187:8 holding 7:4
69:17 74:13 116:11 125:15 guy 51:16 170:5 257:22 holidays 70:2
138:6 148:7 158:20 163:24 Holland 7:12
164:23 189:13 239:20 H honest 24:16 32:15 33:25
248:12 254:14 256:18 257:2 80:15,16 177:23
273:8,15 283:20 half 127:25 134:23 156:3 honestly 38:4 39:19 127:18
giving 55:25 56:21 87:9 222:25 224:21 228:16 133:4 135:16 239:18
163:25 265:21 279:12 285:15 286:20 honesty 34:11 80:19 82:6
285:17 hand 188:11,12 191:21
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7,14,16,25 230:6,11 handled 84:18 horrible 71:3
Glenn 223:22 hanging 112:10 hotel 260:15 261:17
globe 225:2,16 happen 89:18 152:7 162:19 Hotels 100:8
Gold 279:6 163:3 180:6 246:7 277:3,7 hour 62:14 72:21 73:8,13,14
good 8:7 9:2 11:23 17:7 happened 68:9,15 108:7 222:25
18:22 24:11 46:5 69:23 111:22 178:6,20 180:3
112:11 138:13 143:24 hours 164:14
212:14 214:8 248:23 276:12 house 71:13 76:16
146:10 211:25 249:10 278:20
251:10 256:2 274:11 279:8, human 9:23
happening 132:4 163:5
11 284:18 humble 285:6
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gospel 158:16 Harry 48:4 65:10 hurt 178:3
government-issued 7:3 head 9:19 hype 159:17
graduate 11:9 hear 50:14 70:14 158:4
graduated 12:8 164:6 174:15 178:13 180:8 I
Gray 38:10 232:2 284:17
great 51:15,16 162:15 heard 26:24 60:11 62:3 i.e. 251:16
179:24 274:10 282:8 66:22 70:6 158:5 165:17 idea 36:24 46:5
greats 259:17 168:6 178:12 264:15 270:6 identification 7:4 21:10
grew 121:16 122:11,12,18, 276:8 279:21 54:16 92:2 93:8 94:17 96:9
21 hearing 49:19 54:15,20 99:2 114:25 129:23 131:2
55:15,17 59:9 65:25 79:17 141:12 144:18 153:19 166:9
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 13
171:7 175:4 196:6 197:15 intend 143:15 160:16 214:2 215:5 219:17 220:13
198:17 233:19 265:13 intended 161:5,11 221:21 228:19 256:10 257:6
identified 225:3 intent 142:20,21 171:16 260:24,25 261:4,7 262:5
identify 225:17 173:18,20 175:22 176:2,8, 265:3 266:9 267:17 268:2,5,
illegally 59:12 17,20,22 251:17,18 254:18 11,14 269:13,20 276:23
immediately 143:16 146:7 interest 107:7 124:20,24 281:4 282:13 283:3
important 32:12 264:19 129:7,15 134:6 136:23 investments 16:6,9,10
137:4,25 138:2,5,18 139:2 19:23 32:2 37:15,16 45:15
impressed 229:10 59:19 82:14 201:8 202:8
impressive 81:6 101:24 141:10,15 143:15 144:6,11
146:2,6 147:2 148:4,8 151:7 220:10 269:23
265:6 investor 34:22 57:12
183:19 207:16 214:18
inaccurate 121:16 122:4 104:16,23 105:5,8,14
173:25 275:12 interested 64:19,21 151:9
interesting 64:20 256:21 113:16 114:15 202:4,21
inadvertent 78:8 204:11,12,16 207:9,12,18
260:2
inappropriate 179:21 218:16 219:9,14 220:7,12
interests 102:24
Inc.'s 96:18 233:9
International 260:15
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internet 195:6 214:5,13 261:25 262:15
include 101:12 179:5 269:13
interpret 276:7 263:9
included 241:8
interpreted 278:10 Investors' 36:7,8,11 37:2,6,
includes 74:18 269:14
interrogatories 94:15,23 8,19 40:20
including 100:8 214:13 95:10
incorrect 255:20 involved 60:5,21,22 61:7,20,
interrogatory's 94:20 24 66:9 67:7,9,17,18,20,23
increase 136:19 interrupt 27:21 29:19 67:14 71:5 75:25 102:19 103:4
increased 129:3 136:15 69:12 246:2 104:4 107:17 116:5 122:19
indebted 116:22 interrupting 69:13,14 123:3,9 129:13 133:6,16,22
indirectly 66:8 67:6,13 introduced 66:19 67:11 134:19 135:6 136:2,6,7
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14 23:4,8 25:12 33:22 41:18 invest 14:11,23 17:12,23 221:2,4 248:16 257:8
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invested 44:11 57:25 58:12
inflated 156:6 62:23 104:9 156:25 179:4,9 15 157:8,14 158:24 160:13
information 15:9 25:22,23 189:18 194:11 207:7,17,23 162:14,19 211:5 215:3
27:3,12,24 28:22 29:5 30:10 219:12 220:7 228:5 231:2 275:22 277:19
31:2 33:16 88:23 89:2,3 233:5 254:10 258:4 264:8, IPOS 208:2
103:6,8 116:11 132:7 20,25 265:16,17 266:2 Isaac 116:23 118:9 119:17
135:19 158:15 191:4,6 270:17 Israel 11:13
218:9,17 233:10 234:2 investigate 80:14,19 255:17 Isser 7:19 8:6,14,20,24 9:2
235:13 253:24 254:6 256:24
investigation 47:21 52:11 15:16 21:3,11 50:19,24
257:2 280:20,23,24 281:3
53:6,19,21,22 54:6,7 54:17 57:19 65:18 66:20
informed 151:20 72:14,24 73:17,25 74:12
investing 80:3,18 208:2
initiated 85:9 176:10 220:16 233:12 255:22 77:2,5,11,18,24 78:11,15
inside 168:6 investment 17:7 18:21 80:24 91:21 92:3 93:9 94:9,
instance 285:10 19:18 20:11 23:8,19 24:5,9, 18 95:3,25 96:10,15 98:21
instruct 78:8 88:15 190:25 12 25:4,12 33:17,22 35:3 99:3 109:8,14 114:3,8,13,
instructing 77:14,22 61:3 80:15 81:25 104:5 16,18 115:2 120:12 125:18,
instruction 77:14 89:7 105:20 106:10 110:25 111:4 21 129:24 131:3 137:15,20
insult 61:16 113:15 129:4 162:14 191:22 140:9,13 141:13 144:19
201:2,5 205:15,19,24 153:2,14,20 159:25 161:12,
insulted 61:17
206:12,16 207:2 213:24 23 162:5 163:15,21 164:2,7,
19,24 166:10 168:12,17
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 14
171:8 175:5 196:7 197:16 110:1 111:1 112:1 113:1 judgment 110:2 111:9
198:18 222:24 223:5 233:20 114:1 115:1,5 116:1,16,21 July 10:18 99:13,14 103:17,
237:14,22 238:4,10,21 117:1,22 118:1,22 119:1 20 130:2,12 131:5,22,24
239:2,7,15,24 240:2,6 120:1 121:1 122:1 123:1 144:13 148:4 154:11,15
265:14 276:5 280:14 124:1 125:1 126:1,16 127:1 173:11 251:25
284:13,22 286:22 287:3 128:1 129:1 130:1 131:1 June 130:2 131:6 262:12
issue 53:20 54:4,9 229:24 132:1 133:1 134:1 135:1
238:15,17 136:1 137:1 138:1 139:1
140:1 141:1 142:1 143:1 K
issued 230:5,10,18
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148:1 149:1 150:1 151:1 Kalinski 51:15
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164:1 165:1 166:1,12 167:1 kids 71:13
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January 252:20,25 267:7 172:1 173:1 174:1 175:1 kind 13:24 14:12 26:12 29:7
Jeff 107:13 111:20 112:15 176:1 177:1 178:1 179:1 30:10 31:10,11 45:4 48:23
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192:1 193:1 194:1 195:1 kinds 26:15 31:18
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196:1 197:1 198:1 199:1
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14 166:19 196:11,13 238:6 220:1 221:1 222:1 223:1 knowing 209:24 210:2
266:13 224:1 225:1 226:1 227:1 263:14
joining 253:4 228:1 229:1 230:1 231:1 knowledge 58:20 88:18
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12:1 13:1 14:1 15:1 16:1 240:1 241:1 242:1 243:1 21 142:16 143:13 161:9
17:1 18:1 19:1 20:1 21:1,23 244:1 245:1 246:1 247:1 162:4 177:12 178:8 204:7
22:1 23:1 24:1 25:1 26:1 248:1 249:1 250:1 251:1 223:11
27:1 28:1 29:1 30:1 31:1 252:1 253:1 254:1 255:1 Kobre 166:12
32:1 33:1 34:1 35:1 36:1 256:1 257:1 258:1 259:1 Kokos 183:20 234:5,6,12,
37:1 38:1 39:1 40:1 41:1 260:1 261:1 262:1 263:1 14,21
42:1 43:1 44:1 45:1 46:1 264:1 265:1 266:1 267:1
47:1 48:1 49:1 50:1 51:1 268:1 269:1 270:1 271:1
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52:1,17 53:1 54:1 55:1 56:1
57:1 58:1 59:1 60:1 61:1 276:1 277:1 278:1 279:1
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62:1 63:1 64:1 65:1 66:1 lack 9:13 142:16 161:8,21
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288:6,18 162:3 216:19
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87:1 88:1 89:1 90:1 91:1 196:18,19 237:14 239:11 large 118:18 119:20 162:14
92:1 93:1 94:1 95:1 96:1 287:12 213:17
97:1 98:1 99:1 100:1 101:1 journalist 88:13 largest 276:23
102:1 103:1 104:1 105:1 journalists 87:20 88:6 Las 100:9
106:1 107:1 108:1 109:1 judge 113:4 late 64:18
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 15
latest 44:7 59:2 260:4,9 261:2,6,12 264:20
launch 240:12,13 242:5 licensed 13:5,8,20 42:9,13 265:2,3 271:8,14 272:8
249:23 255:18 43:5,11 46:14 274:2,5,13 279:17 285:9
law 109:15 111:7 licenses 45:19 46:6,11 47:3, Livexlive's 80:20 81:17
lawsuit 68:3,8 70:22 79:25 5 227:9 228:22 233:3 234:3
83:11,14,23 84:6,7,24 lie 161:6,16 222:20 253:5,6 271:9,15 285:10
86:13,17,20 87:14,19 88:5, lied 82:24 155:17 156:6 LLC 114:23 115:4 138:15
11 91:5,10,13,15,18 92:11 257:4,10,22 144:22 153:22
97:7 108:8,15 155:11 life 20:15 68:10,13 loading 188:3,20
178:23 179:7 180:12,14,15 lifetime 58:24 59:7 loan 145:3,4,10,14 146:3,15,
196:12 218:10 234:6,9,14 liking 160:6 22 147:3,5,19 152:12,16
235:8 254:5 270:9 278:13 154:7,14,25 266:2,8 267:9,
Limited 144:21
lawsuits 70:25 12,19,23
liquid 152:18
lawyer 283:20,23 locate 192:25 195:2
liquidity 205:18 206:15
lawyer's 284:5 located 106:10,12
list 28:12 29:8 101:20 232:9
lawyers 195:18,22,25 234:2,3 240:24 locked 128:9
196:14,17 logical 280:12
listed 246:14
layoffs 123:19 LOI 251:8,24
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40:23 67:3 72:25 90:11
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192:6 196:11 278:19,21 227:23 231:14 11 237:23
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112:10 Livex 102:12 152:3 209:16 102:9,14 135:22 149:12
left 11:4 39:22 156:9 247:12 278:23 285:20 looked 44:24,25 81:4 190:12
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lender 151:20,24 99:15 127:5 134:22,25 loses 134:22
letter 21:8,14 47:13 48:23 135:19 142:22 146:7,21 losing 133:5 234:8
51:18 52:18 54:10 55:13,18, 147:10 149:14,21 151:2,5, loss 51:23 129:21,25
25 56:22 114:23 115:4 23 152:4 155:8 156:25 130:15,24 131:4 132:11
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20,22 251:16,18 254:18 194:11,15 195:19,23 197:6 lot 31:22,24 33:3 49:2 70:6
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letters 153:21,25 202:2,12 209:11 210:4 130:16 169:5 210:5 218:8
letting 213:2 211:2,11,18 212:8,12,21 222:22 225:19 227:14
level 10:23 213:12 215:11 216:6,10 243:21 247:5 285:2
Levine 109:15,21 112:16 219:17,18 220:17,18 221:13 Loton 58:4,17 64:2,10,12
liabilities 234:4 222:7 224:24 225:7,13,14 72:3 74:17,18,22 146:10
226:4,15 228:6,11 229:15, 179:4,5 183:7,14,18,21
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liar 249:21 186:14 198:10,15,20 199:3,
22 232:3,5,12,13,25 233:5 16 209:11 233:22 234:3
license 45:21,22 46:4,17,24 234:24 235:18 240:24
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244:13,25 246:17 252:21
13 53:4,15,25 56:21 57:2,7 254:10,11 255:23 259:4
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 16
lower 162:24 210:10 manager 128:4 134:9 mention 101:3 102:25
lowered 156:20 managing 16:8 107:12 mentioned 45:16 46:21
lunch 222:25 118:23 58:14 65:9 66:12 106:15
lying 170:6 276:17 Manhattan 260:15 201:7 264:16
manipulation 194:20,24 merge 63:18 241:25
marathon 10:9 merger 63:14,17,22 64:5,11
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made 15:23 17:4,20 18:13 mark 65:19,20 77:11,25 merging 243:8
30:9 48:11 52:4,5 116:7 91:21 94:9 98:21 114:19 Merrick 7:13
133:3 136:4,9,13 144:8 marked 21:6 54:14 91:24 messages 243:25
155:15 165:15,17 170:9 93:5 94:12 96:6 98:23 met 64:16 65:16 66:10 71:12
175:25 177:8 201:8 202:9 114:22 129:20 130:23 141:9 74:14,25 76:12 79:5 186:11
207:2 210:20 211:23 213:24 144:16 153:16 166:6 171:4 260:5
216:20 220:10 228:7 175:3 196:4 197:12 198:14 Meyers 39:4,6,8,12,14 40:2,
245:14,19 246:13 254:17, 233:17 265:11 21 65:7 169:10,11,12
18,24 257:6 262:5 268:15 market 63:5 208:16,21 Miami 250:13
270:12 274:23 278:5 282:16 209:21 210:11 262:4,12 Michael 223:22
283:11 264:7 middle 84:5 234:13 235:8
main 203:21 marketing 98:14 100:6 million 105:10 110:23,24
Majesco 59:10,22,23 63:25 101:9 124:13 141:4 120:15,17,23 131:22,24
64:9,17 66:2 67:23 75:2,5, math 200:5 134:23 136:10 139:16
13,23 76:3,12 79:4 168:19 matter 71:3 214:16 140:19 142:6 143:9 146:4
177:24 178:4,11 179:8,19, MBA 259:25 156:7,14 157:10 158:24
20 180:2,4,10 181:3,8,21 meaning 67:6 196:23 206:10 159:12,14 160:13,25 161:18
182:9 207:24,25 162:18 163:4,5 167:14,24
means 27:24 42:2,5,7 49:15
major 11:17 214:5,23 225:19 60:7,16,23 62:14 107:23 168:9 172:13,15,16,20
majority 102:23 124:20,23 153:4 205:16 206:13 209:3 174:19 182:6,9,12 189:18
129:6,14 134:5 143:14 229:3 284:4 199:6,15,24 200:4 211:5
144:5,10 146:2,5 147:2 meant 31:16 75:11 153:9 212:18 214:12 215:3 219:16
148:3,8 224:11 196:19,25 197:3 241:3 220:16 231:3 233:5,12
make 10:7 23:19 24:5 25:3 265:17 283:14 258:4 264:9 265:2 270:18
28:20 32:15 35:4 37:16 46:4 measure 17:12 274:19,24 275:10,23
55:10 110:21 115:22 116:4 276:11,12,16,24 277:12
118:6 132:23 139:17 169:3, media 9:4 94:14 96:18 278:15,24 279:4,18 280:6,8
7 184:2 185:4 204:5 214:2 124:15 179:4,9 183:19 285:16
218:15 225:4 226:5,6 191:18 194:11,15 197:6
219:18 225:14 231:13 mind 185:8 270:24
230:25 248:11 256:21 265:3 minimum 115:22
268:17 271:3 273:12 277:24 232:25 246:18 252:21
254:10,11 265:4 Mintz 109:15,21 112:16
making 54:5 57:6 135:25 minute 188:10 237:8 275:13
163:8 186:22 187:8 218:11, Media's 94:22 228:11
medical 38:3 minutes 72:22 73:22 90:12
18 256:10 260:23 273:11 163:17 192:24 193:15
281:4 283:2 medication 37:24 51:22
meet 64:15 65:23 66:17 237:11 238:11 239:10
man 193:9 240:3,7,20
manage 14:5,7 16:6 195:2 260:14
meeting 260:21 261:15,16, mischaracterizes 59:16
managed 37:13 176:9 111:18 160:19 173:2
management 11:18 24:16 24
member 22:2 41:4 misleading 222:23 234:9
32:14 33:11,13,18,25 34:10, 250:25 251:9 285:4,19
16,20 35:21 44:25 49:9 members 106:6,16 179:13 286:12,16
57:13 58:21 80:14,20 membership 141:10,15 misled 260:8
114:23 115:4,13 121:20 150:17
missed 39:5 149:16
191:21 194:15 220:24 memory 19:13 51:23
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 17
missing 264:20 necessarily 24:6 26:9,18 objected 161:14
mistake 271:3 30:2 266:3 objecting 113:23 219:22
model 24:19 44:24 needed 40:9 objection 14:2,8 15:13,19
moment 8:10 212:7 negative 163:5,10 16:12 17:8,24 18:23 20:13
money 14:5,7 37:13 48:11 negotiate 127:4 148:25 22:19 23:12,22 24:13 25:6
105:6,8,11 106:18,23 107:5, 149:22 27:10,17 29:13,14 30:19
6,24 108:10 111:3,5,12 negotiated 115:18 139:19 34:7,12 35:10,24 37:4 42:3
116:24 117:3 118:2 128:19 146:12 147:9,17 148:17 43:8,22 53:7 54:2 55:3
132:24 133:3,6,21 134:14, 149:2,18 150:17,25 191:17 57:15 59:3,15,20 60:8 63:7
18,22 135:7 139:9 148:8 negotiating 82:7 149:19 71:19 76:25 77:21 80:5,21
153:7 154:25 169:2,5 173:16,22 81:18 82:3,9 85:6 86:3
214:14,16,23 215:2 226:6 negotiations 173:9 248:17, 106:2 107:8 109:6 111:17
228:5 254:10 261:22 262:15 18 112:21 113:20,21 118:15
263:9 265:8 268:3 277:18 120:2 122:7,22 123:13
net 115:23 116:4 128:12 131:16 133:7,12
281:10 Netflix 279:13
Montauk 40:3,11,12,13,23 134:12 137:9 138:11 142:15
news 31:12 159:15 163:2 147:22 152:14,21 154:19
48:2,15 49:4,6 51:15 64:23
79:10 223:21 nice 81:6 124:14 193:9 158:12 160:17,18 161:7,13,
month 74:13 87:4,7 181:14 nightclub 101:10 183:20 21,23,25 162:3,9 170:2
249:14 262:6 nightclubs 250:12 172:24 177:25 185:6 189:19
nightlife 100:7 195:14 199:20 200:17
months 49:22 176:19 203:24 204:23 208:18
246:10 277:8,11 nods 9:18
212:22 215:20 216:13,23
Montreal 157:6,12 158:25 nonpayment 117:7
219:3,6,10,21 221:15
159:3 160:14,15 162:17 nonpublic 56:11 58:11 222:15 242:23 245:9 248:7,
214:11 273:3,17,23,25 nontransparent 234:25 11,13 249:3,18 252:7
274:3,8,14,17 275:2,8,16,21 normal 70:17 218:16 254:12,22 255:2 262:24
276:10,22 279:3,11,17 North 102:24 104:13 264:22 266:5 269:9,15
Montreal's 275:17 Notary 7:15 288:25 272:13 275:25 277:20
morning 8:7 9:2 note 151:11,13,19 267:19 objections 94:13,21 95:10
Morris's 179:16 noted 287:16 obligated 157:24 280:4
mother 65:4 notes 268:10 obligation 15:9
Motors 57:14 notice 41:17,24 42:21 79:9 obtain 25:18 29:2 187:22
move 66:5 229:12 notoriety 258:6,14 188:21,23 189:22 190:2
moving 273:20 notorious 257:18 258:3 280:20 281:3
multiple 127:24 204:17 November 21:25 23:4,10 obtained 110:2 111:5,9
219:12 224:20 225:12 236:17 240:22 251:23 190:7 191:23 229:15 244:16
251:6,15 number 56:7 116:13 117:14, occasions 127:24 224:20
music 225:2,15,19,23 22 158:11,19 185:17 187:19 occurred 246:22 248:4
226:15 231:15 259:14 203:5 276:20 278:2 250:3
mutual 47:17 numbers 135:17 161:3 occurring 249:13
mutually 8:14 213:19 October 176:4
numeral 205:8 odd 110:24
N numerous 220:8,10 offense 190:16 237:2
offenses 190:22
named 214:13 O offer 36:4 144:8 165:15,17
names 208:4 213:22 172:7,10 174:4,9
narrow 181:19 O'NEILL 259:5,8,25 offered 208:3
NASD 186:21 189:4 oath 288:8,11 offering 160:25 161:18
nationally-known 102:4 object 66:15 78:7 152:24 274:24 280:21
nature 9:23 158:3 offers 174:3
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 18
offhand 270:23 paid 108:21 110:12,15,25 PDF 187:25 192:12,13,21
office 48:25 54:20 123:5 111:6,8 112:13 117:2,10 236:2 237:5,12,15 238:5,7,
223:12,13,17 279:10 118:8,25 140:19 146:5,15 12,14,22,24 239:3,4,16,18
officer 202:3 282:18 155:5 172:16 173:5 199:6, 240:2 282:3
officers 54:20 201:22 18,23,24 200:9 258:21 pending 10:11 125:8
offices 72:6 224:5,7 262:18 penny 111:21 199:11 200:2,
one-year 130:12 133:18 panel 49:17 53:10 54:15 8
59:9 79:17 people 28:6 30:12 61:22,25
ongoing 56:9 250:6
panel's 55:15,17 112:18 68:12,15,16,25 69:16,20,23,
online 33:3,5,6,11 35:2,13
98:13 panic 38:21 25 70:15,19,22,25 79:24
paperwork 84:18 82:15,20 83:3,6,8,10 111:13
op 98:14 119:22 142:12 161:10 168:6
open 20:23 39:15 91:20 paragraph 52:9 100:3,19
101:4,18 102:22 103:7 210:10 213:20 221:3
95:23 114:17 144:14 166:3 247:11,12 250:17,25 251:7
104:14 119:16 120:6,13,19
open-ended 66:16 121:3,15 122:5 126:16 257:15 262:18 263:16 286:2
operation 123:17 127:22 145:7,11 146:11 people's 70:7 82:25
opinion 23:18 101:24 104:2 151:19 167:11,17,20,22 percent 77:9 78:4 106:25
110:6 122:18 222:10 285:6 175:17,20 183:16 185:15,16 111:11 116:17 137:25
286:21 186:5,20 187:2,4 190:14 138:2,5,9,18,21 139:4,6,14
opportunity 11:23,25 78:7 224:16,18 231:9 232:18,23 140:15 141:22 142:5,6
105:20,24 106:11 262:21 236:21 240:21 244:25 156:8,20 157:19 159:5
280:18 281:3,19 284:18 252:19,25 162:24 210:8 221:18,20
opposed 63:5 279:19 part 13:6 14:20 25:2 29:9 286:4
opposite 39:7 31:25 32:8,10,13 33:23 percentage 136:16,19 224:9
option 116:16,18 47:21 53:5,24 59:13 80:13 perform 37:7 100:23 216:5
order 7:24,25 15:24 17:6,16 92:23 93:23 94:5 111:15 performances 250:7
18:20 19:2 23:18,19 24:5 116:19 119:11 141:4 151:12 performed 98:12 111:20
146:6 254:5 168:20 174:7 177:13 200:6 216:8 219:16 220:21
original 124:11 162:22 206:8 223:7 231:10 274:18 performing 219:16
originally 106:8 140:19 participate 62:5 performs 98:11
Ortiz 91:17,18 participated 62:16 63:21 period 76:9,17,18 78:16
177:19 100:10,18 130:12 132:3
OTR 56:13
parties 8:17 115:18 133:18 134:8 135:22 172:21
overvalued 156:5
partner 48:4 65:2,10 169:15, 173:18 182:6 233:24 280:19
owe 116:24
16 permission 48:17,19,21
owed 110:6,9 117:16 154:25
partnerships 245:4 246:20 49:15
owned 98:16 138:5,9 139:4,
passed 42:11 65:4 permitting 51:19
6 171:23 223:6,12 224:2
277:15 past 24:25 29:4,12 30:18 person 69:24 106:13 202:22
32:23 34:9 279:8 204:12 206:10 224:21
owner 38:20 49:6 51:14
224:6,11 pay 30:11 104:18 105:8 257:17
108:22 109:2,21 112:8 personal 81:7,22,23 110:5,8
owners 64:17 98:2
117:23 118:2,13 137:22 119:16,21 128:20 142:16
ownership 49:9 98:24 99:5, 139:13 146:4 147:19 148:10
12,21 107:7 110:13 136:15, 161:8 162:3 205:17 206:14
152:13 153:7 154:24 268:23
19 137:4,23 207:16 155:14,21 165:19 173:4
owning 106:25 personally 48:12,17 67:8,18
201:3 105:2 110:18 112:10 118:20
payable 115:20 258:9 260:5
P paying 50:5 111:13 146:22 persons 281:15
155:22 200:12 263:13 peruses 185:21 197:21
p.m. 168:16 287:16 281:10 205:11
pages 192:25 238:7,22,25 payment 57:6 109:9,10 phase 103:10
154:14
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 19
phone 28:21 90:9,17,21 present 7:3 professional 46:6 47:4
224:21 president 121:14,25 122:3, professionally 45:24,25
pick 20:22 19 135:14 46:5 65:8
piece 223:12,21 press 26:7,8,9,13,17,19 profit 115:23 116:4,8
pipeline 236:17 240:23 29:25 30:2 31:16 32:3,5,11 129:21,25 130:24 131:4
241:3 157:7 158:21 159:4 229:24 132:11 133:17,20 135:13,
pitch 127:23 231:10 230:5,10,17,23 246:25 21,25 136:4,9,13 145:18
pitches 224:17,19 225:12 249:25 277:5 285:8 286:9, 151:6
228:8 231:2 232:21 11 profitable 130:18 133:10
place 31:13 280:12 Prestige 41:11,14,16 profits 103:2 120:17,22
places 151:15 prestigious 225:22 132:8
plaintiff 94:16 145:9 presumed 204:6 program 11:14 13:7,15,20
plaintiff's 287:4 pretty 31:6 37:10,17 45:23 prohibited 77:8
Plaintiffs 94:13 49:25 50:8 61:22 81:5 83:24 promised 155:24 156:14
97:18 150:2,8 218:21 214:16 245:13
plaintiffs' 94:20,21 95:9 221:12 243:7 261:21 264:19
96:3,7 114:11 promises 155:15 157:6
276:25 277:4 210:5,21
planning 59:6 124:9 143:21 previously 38:25 39:10
plans 125:3 140:23 240:24 promote 228:3
40:17 137:24 proof 160:11,15,23 269:19
platform 100:6 101:9 141:3 price 140:6 142:3,9 160:14
226:10,13,14,15,16 properties 57:11 144:21
161:19 162:23 208:8,16,21, 145:3,22
played 60:24 61:15 62:15 23 209:17,21,22 210:12
player 259:16 proposed 167:13,23 183:21
262:4,12 264:5
plays 259:22 proposing 52:19
prices 210:10 263:17
plenty 217:21 proprietary 26:4,21 27:6,15,
prior 69:10,18 71:21,22 82:5 22 28:8,12,18,20 29:3,11,21
point 48:20 51:2 73:11 85:3 83:17 84:16 105:16 119:13 30:3,5,7,13,17
123:2 138:14 144:4 242:13 125:2 155:16 163:7 210:3
246:14 247:7 251:10 273:15 258:14 280:19 protect 84:2 257:20
274:10 private 19:19 23:9 43:18,21 protective 7:25
points 249:23 250:3 255:18 58:18 60:17 62:13 63:18 prove 214:11 222:14
popular 259:15,18 privately 19:17 provide 15:14 81:15 97:6
portion 51:5 74:11 81:3 privilege 191:15 107:18 108:5 118:4 174:13,
284:25 19 229:22 271:22
privileged 77:3,4 262:20
portions 8:13,18 provided 79:9 135:19 191:4
problem 180:5,17,19 185:10 262:21 280:18 281:2
portray 186:3 193:2,5 237:16 239:19,21
providing 101:4,8 102:9
position 12:18 58:21 problems 180:3,6,9 193:13 205:16 206:13 222:7
112:14,20 125:10 126:17, 203:16 204:4 237:9
21,25 128:5 134:10 266:9 provoke 84:9
procedure 52:17
positive 163:6 public 7:16 18:14 23:17
proceeded 51:24 25:21,23 27:3 56:17 57:11,
possesses 280:24 proceeding 55:7,9,14,20 24 60:6,12,13,18,25 61:5,8,
possibility 144:2,7 148:12, process 29:9 49:23 60:21 15,21 62:2,6,17 64:21
14,15,16,20 181:19 82:22 123:24 155:12 215:13 158:14,22 159:13 162:13,17
possibly 14:17 27:19 102:6 224:24 225:7,13 228:13,24 178:21 209:14,20 222:17,18
163:3 241:9 231:6,8,13,17,24 242:20,21 276:21 277:14 284:8
post 152:3 243:3,7 246:6 247:6,22 286:16,18 288:25
potential 32:2 34:21 37:14 produce 113:7,11 publically-traded 16:10
105:20 produced 97:7 113:19 114:9 63:19 158:18 255:9
practice 39:16 137:8,19 publically-trading 15:8
pre 45:2 product 124:10 publications 29:17 31:4,10,
prepare 90:2,5,15 production 114:4 137:16 14,21
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 20
pull 98:19 170:25 197:9 188:13,19 193:24 194:21 231:10 284:9
198:9 195:20 201:17 203:18,19 ready 61:22 159:12 162:17
pulled 95:4 97:16 170:4 207:10 211:8,20 213:5 247:6
punched 208:12 215:4,21,25 216:3,4 217:9, real 143:5 172:11
purchase 15:25 80:4,19 11,12,24,25 219:7,23,25 reality 130:18
83:19 102:8,11 105:3,9 220:3,4,5 225:9 235:11 realize 251:13
106:19,23 107:5 116:17 247:20 251:14 252:6,9,11,
13,14 255:21 256:2 257:25 realized 85:18
117:24 119:10,11,13 135:20 realizes 286:19
141:10,15 142:20 150:17,20 258:10 269:10 274:9 275:4
277:22 283:8,24,25 284:21, realizing 250:20
167:13,23 173:17 174:4
189:6,12 191:17 197:13,17 23 reason 38:2,3 49:11 51:25
200:20 216:11,21 218:4,13 questioning 283:22 85:4 132:10,13 188:2,20
228:6 230:20 248:22 262:23 questions 9:16,17 38:4 214:6 230:14 234:14 256:25
273:13 274:12 76:22 77:6 78:3 139:11 reasonable 280:19,25
purchased 104:24 105:7 140:4 164:17,18,22 213:7 Rebecca 91:9,10
113:9,13 117:6,8 136:21,23 217:23 257:4 281:14,20 recall 13:10 14:14 36:15
138:21 142:5,9 172:19 283:23 284:19 40:24 41:21,22,25 42:6
174:12,18 quickly 284:19 44:4,5 58:2,6,7,10 62:22,25
purchasing 142:12 64:22 68:2 71:8 76:5 79:13
purported 240:24 80:7,8,11 81:10,20 83:12
R 85:8,9 86:11 87:23 88:2,9
purpose 52:19 85:3 89:10,11 90:25 91:4,12
purposes 139:10 raise 64:24 65:11 107:24 93:17,24 96:24,25 97:2,3
pursuant 7:23 52:16 138:3 108:10 111:5,21 160:14,25 99:10,16 100:21 101:19
173:18 198:25 261:22 268:3 274:19,24 102:17 105:4,12 106:4,20
pursuit 145:9 275:23 276:16,24 277:19 108:19 110:17 115:8 116:2,
pushing 124:22 278:24 279:3 280:5 6,10,25 117:4,9 118:3,17,24
put 26:3,22 27:2 29:16 48:6 raised 10:21 108:3 277:12 125:13 126:22 127:6,7,14
69:9 71:9 104:15 105:5,11 raising 158:23 261:24 128:7,21,23 130:6 131:10
106:20,22 107:4,23 111:23 262:15 263:8 276:10 278:15 132:4 133:4 135:17,24
157:7 159:4 169:19,23 279:18 139:23 141:18 142:4 146:17
214:12,14,15,20,25 226:9 ran 183:12 184:5 185:22,23, 147:12,25 148:19,20 150:6,
240:18 257:20 265:7 285:22 25 186:12 7,12,21 151:8 165:5 167:5
puts 285:3,8 Randy 253:4,9,12,21 169:4,6 170:15,16,24
putting 18:5 63:2 64:12 range 119:22 171:14 173:13,14 174:21
214:23 rap 259:18 176:24,25 178:14 179:2,10
rappers 259:19 180:7,11,20 181:13,17
rate 286:4 182:20,22 183:15,16 186:16
Q 187:10,12 188:25 189:2,7,
rationalize 219:20 14 190:23 192:6 194:6,8
QA 233:18,21 rationalizing 220:2 195:4,24 200:23,24 201:11,
quarter 134:23 285:16,21 RDM 166:14 18 204:22 205:22 212:24,25
question 9:21,24 10:3,5,7, reach 148:25 217:15,17 218:6 221:17,22
11,12 16:14 18:2 22:21,22 read 14:15 15:22 23:17 24:4 222:3,5 224:10 229:10,20,
27:5 50:13,18,19,23,25 51:3 25:13,15 29:16 31:6,13,15, 23 230:21,24 231:4 233:8
57:22 60:4 61:9,19,23 22,24 32:3,5,11 50:24 51:3, 235:6,7,14,24 241:15
65:15,23 66:15,16,18,21,25 5 74:8,11 80:24 81:3 100:19 244:14 247:13,15 249:5,8,
67:15 69:15 74:9 80:25 111:23,25 115:19 184:17,19 20 251:20,24 252:11 253:8,
88:17,23 89:5 101:5 104:22 185:18 202:25 205:10,13 18 254:2 255:4,6,14 258:16
109:2,7 113:24 117:15 206:3,4 241:15 242:6,7 259:9 261:13 264:11 267:13
124:6 125:7 135:2,4 149:16 268:7 269:22 281:7,8,21 268:21 269:21 270:23 271:2
151:4 158:3,5 159:18,24 284:3,22,25 288:7 272:17 273:18 274:20
160:2 163:12,19 164:3 reading 31:24 184:12 receive 11:19 27:12 46:23
170:11 176:6 186:15
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 21
115:24 151:25 266:14,17,20 refreshes 176:23 134:9 150:5 258:19,22
281:15 refuse 271:22 272:8 repaid 119:25
received 10:24 79:15,16,17, refusing 229:21 repay 145:4
20 121:2 199:2,15,25 registered 21:24 repayment 154:6
200:15 266:22,23 registration 41:18,19 42:22 repeat 80:23 104:22 181:7
receiving 256:11 43:3 225:9 236:4 252:17 269:17
recess 57:20 73:23 168:15 regret 282:4 271:10 284:21
223:3 286:25 regulations 15:15 42:18 rephrase 10:6 169:21
recognize 21:12,16 92:5 regulatory 21:7,14 54:19 rephrased 274:9
94:24 95:7 115:6 130:4 reiterate 279:22 report 187:2,21,23 188:21,
141:14,16 175:8 197:19,23 22 189:17,23 190:2,8
198:19 related 190:22 202:11
relation 174:8 191:24 192:5 195:9 233:18
recollection 17:15 18:12 reporter 7:2,7,10 9:6,16,25
23:3 36:6 39:19,24 46:19 relationship 81:8,22,24
149:25 178:3 259:13 21:6 50:22 51:5 54:14 74:6,
48:24 49:8 51:21 53:3,15 11 81:3 88:12 91:24 93:5
55:21 64:8,14 65:14 74:23 relationships 69:21 70:7,15
225:5 250:11,22 259:21,24 94:12 96:6 98:23 114:19,22
79:19 94:3,5,7 95:16,22 129:20 130:23 141:9 144:16
99:24 103:9 115:17 118:5 release 27:6,15,23 28:9,12 153:16 166:6 171:4,9 196:4
120:25 121:14,24 132:17 30:8,13,17 32:5 157:7 197:12 198:14 233:17
133:2 135:8 136:12 138:24 158:21 159:4 229:24 230:5, 265:11 284:25
139:15 144:12 149:5 153:13 10 247:2
reporters 87:20 88:5
176:23 180:24 200:22 releases 26:3,7,8,9,10,11,
206:20 208:22 217:3,4 12,13,15,17,18,20,22 27:2 reports 198:10 233:21
220:23 265:19 271:16 28:18,20 29:3,9,10,11,22,25 represent 9:3 103:20 109:16
272:25 30:2,3,5 31:5,11,15,16,17, 167:7 188:6 201:20 240:20
recommend 15:25 16:9 18,20 32:3,11 35:20 230:18, representation 109:23
17:17,22 35:3 37:15 23 250:2 277:6 285:3,7,8 188:14 274:22
recommended 14:10 286:9,11 representations 206:8
recommending 14:23 82:13 releasing 230:15 207:13 252:3 270:12
relied 158:10 215:19 282:14 282:16,22
record 7:8,20 9:11 13:24
21:13 32:17,20,24 74:2,3 rely 264:24 representative 21:25
93:10 94:19 96:2 99:6 relying 215:16 282:11,21,25 represented 111:7 160:12
160:10 275:3 282:8 285:9 283:4,11 207:3 246:15
286:2,13,14,15 287:3,12 remains 112:12 reputation 24:17 162:15
288:10,12 remember 9:19 11:10 12:7 258:25
records 270:22 13:2,13 14:25 16:24 34:15, request 10:12 28:10,11,17
red 254:20 19,24 36:13,21,23 39:19 29:5,15 30:9 31:2 96:4,8
reduced 115:21 44:16 45:12,15 46:19 71:7 109:8,10 114:3 272:4
refer 97:23 98:3 101:13,17 75:8,9 79:20 81:20 116:25 requested 51:4 56:8,12
186:25 187:13 240:8,15 117:12 118:8,11 119:24 74:10 81:2 222:8 271:23
120:4 125:24 127:18 135:16 272:6,9 284:24
reference 75:2
149:6 158:23 178:5 179:22 Requests 30:25
referenced 145:15,17 206:6
237:20 182:2 184:6,7,13 189:15,21 research 14:10,12 19:7,9
190:11 191:23,24 201:14,16 35:16 209:7 216:17,18
referred 176:9 179:24 208:4 217:18 218:2 219:15
220:25 reserving 8:17
220:15 222:6 229:21 230:2, residency 251:4
referring 76:8,9 97:24 98:5 3,21 242:7 253:8 265:21
100:10,19 140:25 243:20 resignation 47:12,14
267:14,20,21 272:5 resigned 56:25 59:2
267:18 remembered 183:22
reflect 99:12 resigning 56:20
remove 126:20 respect 56:24 193:18,19
reflects 99:20 removed 125:9 126:8,10,13,
refresh 23:2 53:3 132:16 205:18 206:16 282:12
24 127:5,12,15 128:3,4,6,15
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 22
respects 9:9 14,18 92:10 127:5,11,12 save 164:20
respond 28:23 128:3,5 143:21 147:13 schedule 287:7
respondent 52:24 148:25 149:8,11,12,15,17, Schlam 196:19,25
response 30:8 69:4 78:6 20 152:16 155:2,7,8,21 Schnaier 7:9 8:1,7,25 9:1
84:9 94:20 96:3,7 272:3 156:6 157:23 158:9 160:16 10:1,15 11:1 12:1 13:1 14:1
responses 94:13,21 95:9,19 161:4,16 168:19 169:7,14 15:1 16:1 17:1 18:1 19:1
170:4,7,13 173:10,22 20:1,15,22 21:1,17,23 22:1
responsibilities 40:16 177:23 179:8,19 180:9,22,
responsible 110:19 23:1 24:1 25:1 26:1 27:1
25 181:5,9,11,23 182:9 28:1 29:1 30:1 31:1 32:1
responsive 51:8 65:24 183:7 184:14 185:2,23
257:24 33:1 34:1 35:1 36:1 37:1,23
186:14 188:22 190:8,15 38:1 39:1 40:1 41:1,3 42:1
rest 44:16 194:15,23 195:5,6,12,19,23 43:1 44:1 45:1 46:1 47:1
result 108:8 196:11 197:6 208:14,20,22 48:1 49:1 50:1,12 51:1 52:1,
resulted 258:18,24 209:16 215:7,9,11,16,18 17 53:1 54:1 55:1 56:1,8,12
retain 167:6,8 216:6,9,20 218:3 222:2,6 57:1 58:1 59:1 60:1 61:1
returned 47:18 230:25 232:10 235:4 241:11 62:1 63:1 64:1 65:1 66:1
242:18 243:2 246:15 247:17 67:1 68:1 69:1,13 70:1 71:1
returns 74:7
248:4,19 249:2 256:22 72:1,10 73:1,3 74:1 75:1
revenue 45:2 233:2 234:9, 259:7 260:5,8,14,19 261:11
10,16,24 285:12,16,19,25 76:1 77:1 78:1 79:1 80:1
263:8 264:15 270:12,18 81:1 82:1 83:1 84:1 85:1
286:2 271:6,7,14,24 272:8 278:5,
revenues 211:18 233:13 86:1 87:1 88:1 89:1 90:1
14,24 279:2,5,16 280:2 91:1 92:1,6 93:1 94:1 95:1
235:18 283:2,11 96:1,12,20 97:1 98:1 99:1
reverse 63:14,17,22 64:5,11 Rob's 81:12 155:9,14,20 100:1 101:1 102:1 103:1
156:8,15,18 157:16 162:20 156:11,12 263:19 104:1,15 105:1 106:1 107:1
review 8:11 14:21 17:4 18:7 Robert 196:9 266:12 108:1 109:1 110:1 111:1
25:2,17 26:17,19 30:6 35:20 Rock 100:8,25 260:9,12,13 112:1 113:1 114:1 115:1,5,7
90:14 92:15 93:15 95:14 116:1,16,22 117:1,22 118:1,
role 57:12 59:19 60:24 61:6,
166:24 167:3 22 119:1 120:1 121:1,4
7 62:16 121:20
reviewed 17:15,20 18:3,8,20 122:1 123:1 124:1 125:1
roles 61:4,14
28:15 29:21,25 126:1,17 127:1 128:1 129:1
Roman 205:8
reviewing 18:13 130:1,5 131:1 132:1 133:1
room 170:7
revoked 47:15 134:1 135:1,3 136:1 137:1
Roughly 12:13 138:1 139:1 140:1,11 141:1,
rich 265:6
ruined 68:9,13 82:24 17 142:1 143:1 144:1,24
Richard 86:14,20 235:16,20
247:11 rule 52:16,20 53:24 145:1,8,12 146:1 147:1
rid 123:6,16 rules 9:13 42:17 62:11 148:1 149:1 150:1 151:1
rights 8:18 224:25 225:8,15, ruling 77:12,25 152:1 153:1 154:1,2 155:1
19,24 226:4,5 227:22 running 247:9 156:1 157:1 158:1 159:1
229:16,25 231:14 248:5 160:1,10 161:1,15 162:1,8
256:20 260:9,11 163:1,11 164:1 165:1 166:1,
S 14 167:1 168:1 169:1 170:1
Rio 260:10,12,13
171:1 172:1 173:1 174:1
risk 205:15 206:12 207:4 S1 273:23 274:4,14,17 175:1 176:1 177:1 178:1
River 102:24 104:13 275:15,23 280:8 179:1 180:1 181:1 182:1
RNG 104:17,19 113:15 Sabo 91:3,6 183:1,21 184:1 185:1 186:1,
114:15 117:25 119:10 salaries 130:16 6,8,9 187:1 188:1 189:1
121:21 130:17 salary 115:20,25 190:1 191:1 192:1 193:1,3,
Rob 9:5 64:15 65:12,16,23 sale 99:15 149:14 151:21,23 20 194:1 195:1 196:1 197:1
66:7,10 67:5,9,17,18,19,21 261:2,5,6,11 198:1 199:1 200:1 201:1
68:9,13,17,25 69:16,19 sales 56:10 131:21 143:8 202:1 203:1,11 204:1,5
70:15 71:4,5 72:2 74:14,16 Sasha 91:14 205:1,2 206:1,25 207:1
78:17,22 79:24 81:12,14 208:1 209:1 210:1 211:1,6
82:16,20 83:24 84:3 85:11, 212:1 213:1 214:1 215:1
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 23
216:1 217:1,21 218:1 219:1 41:17 42:7,9,13,22 43:14 shareholder 127:3
220:1 221:1 222:1 223:1,6 58:25 186:23 189:9,17 shares 48:11,18,19 51:19
224:1,22,23 225:1 226:1 195:22 202:3 233:23 258:19 56:11 98:16 117:6,8 152:3,
227:1 228:1 229:1 230:1 277:16 18 155:3,23,25 157:19
231:1,12 232:1,20,24 233:1 security 15:23 17:16,20 159:6 171:18,23 172:3,7
234:1 235:1 236:1,25 237:1, 187:9 173:7 176:17 183:3 199:2,
11 238:1,11 239:1 240:1,22 Seed 44:15 15,25 200:5,16,21 201:13
241:1 242:1 243:1 244:1,8 seeking 147:3,5 192:8 208:23,24 209:11,17,23
245:1 246:1 247:1 248:1 274:18 260:7 266:4 280:21 282:20
249:1 250:1 251:1,10 252:1, sell 48:19 51:19 142:23 sheet 265:20 269:18
20 253:1,2 254:1 255:1 143:16 146:7,21 149:20 sheet already 269:4
256:1 257:1 258:1,12 259:1 150:22 157:24 165:3 shell 63:19 65:11,13 67:10,
260:1 261:1 262:1 263:1 170:14,17 175:19 177:6,20 11 168:21,22 183:18 210:4,
264:1 265:1 266:1,13 267:1 191:18 256:10 257:6 14,17 211:3,11 212:8,12,21
268:1 269:1 270:1 271:1 213:12,13,17
272:1 273:1 274:1,10 275:1, selling 172:3 208:22 209:17
18 276:1,14 277:1 278:1 219:17 220:17 227:5 231:19 shiva 65:6,25 66:13
279:1 280:1 281:1 282:1,9 233:12 255:23 shocked 270:3
283:1 284:1,5 285:1 286:1 semester 11:4 short 280:13
287:1 288:6,18 send 27:14 28:6,21 29:8 shortly 186:6,11
Schnaier's 41:18 287:8 154:9 222:9 230:7,16,17 show 48:7 135:21 215:12
school 11:5,6 12:8,10 232:9 239:3 266:14,17,19 250:4 268:23 273:17 286:10
267:4 271:25 272:9 showed 48:9 176:20 265:23
Schurr 102:23 103:12,18
126:19 sending 29:9 84:19 250:24 269:12,25
251:6 showing 234:11
Schurr's 113:14 122:2
sends 276:18 shown 133:20
screen 227:8,11 239:6
sense 144:8 shows 268:7
screwed 155:2
sentence 167:12,17,23 shut 38:20 123:15,17 128:17
scroll 151:11 187:14,17 232:19
203:3 267:8 shutting 123:12
separate 140:4 side 228:19
scrolling 192:23
Sephardic 11:6 sign 28:25 29:7 226:23
sealed 276:9
September 194:3 201:2 248:22
search 33:8,11 35:2,12 288:8
searches 195:5,6 217:16 signature 21:20 95:11 115:9
series 46:8,17,22 47:7,25 151:13
season 244:12 139:10
Seat 207:22 signatures 198:22
served 121:4 signed 83:20 95:15 102:8,12
seated 124:10 140:25 141:3 serves 19:14
SEC 15:14 18:13,20 23:17 110:4,18 112:10 113:14
service 28:24 117:19 136:18 137:3 138:4
25:2 195:18,21,24 196:14, services 98:11 100:23 101:4
17,19,22 197:2,5,8 215:9 142:19,21 151:15 157:11,13
102:9 107:18 108:5 117:24 162:16 189:6,11 198:5
221:13 233:3 235:17 249:24 118:4
284:8 204:19 205:20 206:10,19
set 94:15,22 96:18 117:7 210:18,25 211:9,19 212:6,
secret 83:4,5 11,20 213:13 216:12 218:5
settled 108:23,25
section 115:19 116:21 117:7 228:6,8,15,17 230:13,19
201:19,25 205:4 280:17 settlement 52:20 53:5,23,24
shake 9:18 244:5,7 245:17 246:23
secure 248:20 248:2 249:12 252:21 262:23
secured 242:14,18,19 Shaquille 259:5,8,10,25
268:20,23 270:10,16 274:13
243:12,14,16 245:7,13 share 157:9 158:23 160:14 275:12,14 276:9,24 278:23,
246:16 247:4,25 161:2,19 162:23 199:19,23 25 279:2,15 280:5,7 281:9,
securing 243:3 200:5,7,8,9,13,15 208:7,8, 10,18,21 283:5,6,9,18 284:2
16,25 239:6 261:25 262:5, 288:20
securities 14:16 15:3,10 12,16 263:9,11
17:5 21:25 23:4,8 25:13,15 significant 214:2 215:5
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 24
signing 80:3,18 110:7,20 272:5 285:18 215:6 229:14 245:18 249:23
209:9 216:20 218:12 230:19 specifically 15:2 16:3 19:3 250:2 253:19 255:22,24
271:13 273:12 25:10 80:10 82:19 101:3,13 263:7
silence 277:8,9 202:10 225:3,17 244:18 Sterling 12:4,5,18 13:3,12,
similar 234:14 245:23 247:13,15 271:20 18 14:21 20:8 36:3 37:9,13
simple 135:2 273:18 279:9 40:19
Singer 107:13 111:20 specifics 34:5 Steve 8:8 50:16 61:16 67:2
112:15 speculate 182:3 276:3 77:14 125:16 140:3 163:18
single 218:2 220:15,20 speculating 39:20 101:21 280:9,11
Sinn 91:9,11 speculation 29:23 162:4 Steven 9:2
sir 26:16 101:6 159:22 spend 62:14 stipulate 72:18,25
sit 286:10 split 156:16,18 162:20 stipulating 73:7
sit-out 49:21 53:12 201:4,9,13 stock 16:2 17:22 56:11
site 26:5 221:7 226:22,24 spoke 50:4 90:23 91:3 57:14 59:13 62:8,10 63:3,4,
227:17 229:4 232:4,6 106:6,14 143:20 157:5 6,9,10 151:10 156:7,13,16,
245:15,20 184:5,22 243:6 18 157:3 159:14 162:20
spoken 75:23 143:17 181:23 165:25 172:8,15 194:19,23
sitting 50:6 57:7 65:6 196:15 200:7 208:9,17
situation 255:11 197:7 287:4
spring 175:18 209:15 210:10 256:11 258:5
six-percent 107:6 263:10 286:19
Slacker 234:23 285:24,25 ss 288:4
stockbroker 38:14 39:9
small 277:11 stall 66:4 40:15 183:2
smarter 156:23 286:17 stamp 114:12 Stone 196:19,25
social 124:15 stand 73:20 stop 19:11 155:22 219:5
software 44:15 124:10 standard 256:9 269:8 272:12
207:22 start 9:12,21 18:14 261:10 stopped 11:16 16:25 57:23
sold 48:11 49:6 102:23 started 8:25 20:2,8 64:18 stories 210:5
172:2 198:2 241:21 254:10 76:10,15 124:21 133:5 story 50:9 206:22
258:4 181:9 190:9 254:7 257:13
263:23 straight 12:9 112:3
sole 202:3 224:6 strategy 230:14
solely 88:19 89:3 282:14 starting 75:17 122:9 124:9,
19 286:14 stream 224:25 225:15
someone's 268:23 227:23 231:14 232:4,6
son 179:16,17 260:19 starts 185:18 192:13,22
260:9,12,13
sort 98:14 172:9 210:11 state 7:7,16,20 45:21 244:24
284:6 288:3 streaming 225:8,18 226:5,8,
230:14 244:22 19 228:12,23 232:12,15
sought 146:3 stated 146:13 207:11 214:17 234:17 244:13 248:5
275:2 283:10 285:10,12,20
source 191:11
statement 111:15 129:21,25 Street 38:8 48:25
speak 70:5 72:16 84:21 130:24 131:5 206:2 216:19
86:22,24,25 87:6,16 181:20 243:10 274:18 277:2 strip 169:18,22
195:21 213:2 strong 81:23 276:25
statements 85:25 95:19
speaking 15:19 64:18 84:14, 132:12 216:10 270:18 stronger 124:14,15
16 85:4 149:5,9 151:8 152:5 283:11 structure 98:24 99:6,12,21
161:13,25 195:24 204:8 110:14 137:23
states 287:14
speaks 59:17 stuff 19:19 26:2,4,5 27:7,8
stating 229:2 252:21 253:3
special 173:6 277:6 29:15 31:13,22 32:18 33:4
specialist 286:7 stationery 153:22 171:10 45:5 49:3 51:23 62:8,23
specific 17:15 18:12 28:11 69:22 84:19 118:7 123:6
status 155:11 215:12 130:17 158:15 160:22
29:5 30:8 61:3 62:4,25
66:18,21,24,25 67:15 85:5 stepped 132:18 176:14 214:20 218:15
155:19 164:18,22,23 225:8 steps 24:10 44:18,20,22 221:11 241:20,22 251:4,5
243:17 246:11 247:14,17 80:17 97:9,13 157:2,22 257:9 271:21 273:2
158:8 159:20 168:4 191:20
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 25
subject 8:10 89:6 115:3 120:9,10,12 126:16 testify 217:22
submits 52:18 129:18 130:21 131:7 139:24 testifying 54:25 79:23
submitted 52:22 141:7 144:14 153:11,14,21 220:6,9
submitting 56:20 166:3 168:12 170:25 testimony 24:3 111:19
subscribed 288:20 174:22,24 184:11,20 160:19 173:3 184:3 185:5
185:12,13 186:18,19 212:10 288:7,11
subscriber 226:23 192:14,17 193:16 196:2
subscribing 282:20 Texas 264:14
197:9 198:9 233:15 237:6 thievery 210:13
subscription 28:23 29:7 265:9 266:11 280:15
30:11 198:10,11,12,15,20 thing 37:12 38:24 40:19
table 272:18 273:14 156:5 157:15 164:10 211:24
201:6,20 202:14,16 203:11 tabs 203:16
204:20 205:5 206:19 207:9, 238:23 253:12 264:7,19
15 209:9 210:19,25 211:10, takes 236:11 269:2
19 212:7,11,20 213:14 taking 57:7 60:6,12,25 61:4, things 19:6,8 24:15,20,23
270:10,17 271:6,13 273:11 7,15,21 62:2,5,16 67:3 35:15,17 70:6,14,21 73:21
280:15 281:24 282:2 283:6, 188:9 193:15 79:23 82:15 85:15 146:16
9 talk 55:24 69:24 70:11 72:25 157:23 179:19 215:7,12
subscriptions 244:12 160:9 244:22 284:16 217:22 218:12 221:25
subsequently 195:3 talking 10:2 20:25 29:22 241:5,7 251:3 252:15
subsidiaries 98:6 33:13,20 57:13 71:21 81:12 254:21 255:17 256:6,22
83:17 85:24 86:6 125:17,21 257:12 273:19 283:2
subsidiary 282:19 128:3 138:12 168:19 196:24 thinking 58:10 252:12,24
substance 248:25 206:23 228:18 232:21 235:9 255:6 286:3
substantial 71:8 183:5 240:10 244:19 245:22,24 thinks 286:17
232:25 246:3 255:15 261:20 265:23 thought 22:25 44:21 75:19
successful 265:7 talks 143:21 142:13,17 143:23 156:23
sucked 130:16 team 24:16 32:14 33:18,25 160:21 211:14 213:22,25
sue 108:4 109:22 34:10,16,21 35:21 44:25 228:18
sued 59:18 111:5,9 145:4 80:14,20 194:15 253:4,9 threat 170:9
166:16 178:5,19 technological 193:2,13 three-for-one 156:15,18
suing 178:5 technology 44:10,13,17 157:16
suit 253:24 45:10,17 58:14 207:22 throw 125:25 207:24
summer 83:18 136:14 138:9 telling 33:23 55:19 68:12,16 ticket 131:21 141:2 143:8
139:14 82:19 83:3,6 147:15 157:20 170:22 232:14
support 218:10 188:12 211:21 214:4 241:19 ticketed 250:11,12
supposed 112:5 118:6 247:19 ticketing 98:13 100:6 101:9
119:13 154:23 157:17 tells 160:8 118:7 124:10 141:3 226:2
268:23 ten 16:18 17:2 19:9 163:17 232:11 251:8,16
surprised 61:18 84:2 ten-minute 74:4 168:14 tickets 9:4 124:18 227:5
surrendered 52:8,12 53:25 term 15:5 27:22 28:19 60:7, 231:19
surrendering 53:4 12,16 61:25 62:3 146:15 tied 260:25
sway 264:24 152:25 153:3 209:2 241:3 time 10:2 11:16 21:5 39:16
sworn 7:15 265:20 269:18 46:25 50:3 51:4 54:13
system 128:10 terminated 103:21,23 64:16,20,23 65:3,21 66:4
126:17 128:16 72:2,9 73:10 74:5,10,14,16,
terminating 41:18 21 76:17 78:16 79:15 81:2
T termination 41:17,24 42:21 90:23 91:3,23 93:4 94:11
43:2 96:5 97:5 98:22 100:10
tab 21:2,4 52:9,15 53:17 103:11,23 114:21 125:20
terms 179:24 267:23 281:16
54:12 55:24 79:16 91:20 126:6 129:19 130:22 132:3
93:2 94:8,25 95:3,5,9,24 test 42:8,11
testified 7:17 75:10 80:12 139:22 141:8 143:8 144:15
96:13,15,16 98:19 100:14, 148:12 149:3 151:3,10
15,16 110:13 114:11,17 120:3 213:11
153:15 156:17 160:7,8
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 26
164:3,5,8,20 166:5 171:3, trades 79:10 187:9 ultra 225:23
21,22 172:21 173:17 174:25 trading 196:15 200:7 208:9 unauthorized 186:23 187:8
176:10 178:10,22 179:18 209:15,16 263:10,14 286:20 uncover 195:11,12
180:2 181:9,22 182:10 trained 14:4 uncredible 79:8
183:6,8,17 185:23 186:13, trainee 20:3,4 underlying 113:24
17 187:10 188:9 193:20 training 12:19,20 13:6,15,20
196:3 197:11 198:13 199:4, underneath 240:14
16 206:18 208:10 209:24 transaction 78:25 109:16,24 undersigned 201:21 204:10
210:24 211:4,9 212:19 111:8,10,14 113:8,12 205:14 206:6,9 280:18
216:6 217:22 221:21 228:10 114:14 138:8,16 140:14 281:14 282:10,13,17,21
232:20,24 233:16 237:7,24 145:13,25 146:14 147:10 understand 9:24 10:5 18:10
247:7 252:12 253:23 255:11 148:3 281:17 27:14,16 35:5 55:10 62:13
256:6 259:11,14 260:23,24 transactions 186:23 74:19 85:21 98:3,7 101:5
265:10 280:19 282:8 284:5, transcript 7:22 8:3,11,16 113:3 119:7 155:9,19 176:6
24 287:16 288:7,9 181:18 184:2 185:5 193:11
time's 234:4 transfer 151:24 203:15,20,22 212:3 215:24
times 62:20 75:7 86:19 90:6 transferred 137:5 216:2,4 219:24 220:5
103:15 159:6 181:24,25 transparency 48:10 221:10 225:10 226:17
182:6,9,13,16 207:14,19 treat 9:8 193:17 239:19 247:21 265:17
208:6 230:25 266:21
treated 8:21
title 8:2 121:12,25 122:2 understandable 10:8
treating 193:19
today 37:24 38:5 89:14,17, understanding 60:15,17
true 103:3 132:21 135:5 78:14 156:21 195:20 207:10
18 167:4 184:25 237:21 146:3 157:13 168:4,5
287:6 275:7,21
170:10 177:5 205:25 215:10
told 29:24 33:15 35:14 37:12 218:16 222:14 233:4 242:17 understands 204:5
62:12 68:24 69:5,8,16,20 244:15 245:6 251:17,23 understood 69:3
70:4 79:24 82:15,17 83:24 252:24 256:23 262:2,3,7,14 underwriter 274:4,15 275:17
84:23 89:4 100:15 146:8,23 270:13,19 286:5 288:9,12 underwriters 63:5,9,10
147:16,18,21 148:7,19 Trump 260:15 261:16 unhappy 179:23
149:11 150:4,11,21,23,24 trust 71:16 78:17,18,20,23 uniform 41:17 42:21
157:4,23 158:9 165:20,22, 184:18 255:7 university 10:25
23,24,25 172:9 180:13,20 trusted 71:14 78:17,22 Unknown 232:19,24
182:20 183:11 208:15
trustworthy 71:10 unofficial 84:17
210:21 211:16 212:4 215:8,
18 218:3 222:2 223:24 truth 82:17 83:9 218:24 unpaid 109:22
224:23 228:13,23 231:11,23 219:2 221:23 unprofessional 61:12
232:10 238:4 241:18,22,24 turn 52:14 93:2 94:8 100:2 unprovoked 85:15
242:3 244:20 245:13 129:18 130:21 139:24 unrelated 186:8
247:23,24 248:19 249:10 141:7,20 153:11 168:12 update 236:17 240:23
250:16 255:13 265:16 194:16 update/pipeline 240:13
267:16 270:6 turned 123:19 157:18 updates 232:9 247:13
tomorrow 248:23 253:4 turning 79:7 128:24 186:18 upset 20:20 51:13 87:16
254:17 twenty 220:14 161:17 222:23
top 156:9 196:8 238:22,23 two-for-one 201:9,12
266:11 twofold 224:22
topic 86:7 V
type 9:18,25 278:3
totally 155:16,17 257:10 Typically 271:24 vague 61:9
touchy 268:25 typing 9:17 valuable 211:24
track 32:17,20,24 74:5,7 valuation 143:8 156:14
trade 58:25 U 172:20 173:2,4 279:11
traded 59:13 valued 156:4 210:8
ugly 196:13
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 27
Vegas 100:9 250:13 16,19 166:14,16 167:7,13, withdrawn 16:7 19:10 32:21
vehicle 190:16,22 24 169:19,24 170:13,14,17 47:3 74:15 75:24 78:21
venues 250:6,10,21 171:16,17,20,24 172:2,8,13, 82:14 86:18 89:12 92:14
veracity 216:19 15,19 173:12,15 174:5,8,12, 99:19 108:20 113:12,15
verbal 9:15,19 18 175:11,19,21 176:9 125:5,7 128:4 129:5 138:3,6
177:6,17,20 180:22 181:5, 166:23 173:25 174:9,11
verbatim 279:13 10,22 182:11 183:9 186:7 177:4 181:2 194:2 195:7
verification 7:5 252:15 190:10 191:18 198:23 200:19 205:3 208:6 216:7
verify 221:25 229:15 250:2 201:9,10 202:11 214:9 220:8 247:18,20 252:18
264:9 216:8 227:4,5 231:18 259:3 263:2,6 268:18
veteran 279:7 232:11 234:15 250:17 witness's 78:6
video 64:20 251:16,19 255:16 261:2,6, won 108:17
viewers 226:7 11 271:7 273:23 woodworks 257:15
violation 53:24 Wantickets' 98:24 99:5 word 9:13 18:11 152:17
violations 52:20,25 189:4,9, 128:19 129:2,15 166:20 172:25 215:17
17 Wantickets's 121:5 128:10 words 85:20 229:14 248:25
violative 56:3,7 132:8 140:22 198:2 219:18 work 11:24 12:2 37:18 38:21
voluntarily 47:19,24 220:17 250:11,22 251:7 39:3 41:10 43:14 72:5
261:5 107:25 123:5 161:5 223:14
volunteered 85:25
Wantmcs 201:23 204:15 worked 67:19,20 98:15
205:21,24 206:2 125:2
W warrant 199:11 200:2 working 48:15 71:16 124:19
201:25 204:15 206:9 280:22 211:5 215:15 241:5 245:3
wait 119:15 228:2 236:18 282:20
267:20 269:11 275:13 246:19 247:8,9
warranted 204:19 works 251:16
waited 277:10 warrantees 282:16,22
waiting 230:12 world 159:11 259:14 276:23
warrants 84:20 199:3,9 worried 188:8,16,18
waiver 21:9,15 52:18 55:18 200:2,8,10 206:6
78:9,10 worry 188:7,15,17
wasting 66:3
wanted 39:15 48:16 49:19 worse 129:16,17 132:17
watch 226:18 258:24
54:10 107:11 142:23 177:5
watching 226:20 worth 142:7 152:3 156:8,13,
219:2 222:11,12 268:2
water 207:23 21,22 157:18 159:5,12,14
Wantickets 44:8 45:10,16
58:18,23 69:19 71:6,18 72:5 ways 29:10 30:14,16,25 162:18 172:16 173:8 209:24
75:18 76:3,10,19 78:25 125:4 210:7
97:21,24,25 98:3,4,5,11,16 wealthy 264:13 wound 106:25 110:23
99:13,21 100:5,23 101:7 website 81:16,17 215:14 111:11 200:4
102:8,15,19,24 103:2,4,11, 226:11,12 227:4,10,18,19, Wow 70:23 194:12
22 104:5,9,24 105:23 24 228:11,22 244:5,10,13 write 153:25 183:17 252:19
106:10,12 107:2,20 109:17 246:25 249:16,24 writes 196:11
110:12 111:2,11 113:9,13 Wednesday 154:8,15 writing 252:13
115:22 116:3,4,7 118:22,23 week 65:3 87:2 written 79:9 81:6 108:12
119:3 120:14,22 121:6,9,17, weeks 196:12 251:8,17,19 153:21
20 122:11,14,18,20 124:7, 254:19
20 125:3,5,10 126:24 128:5, wrong 40:4 52:5 77:10 78:5
Wells 83:11,14 90:24,25 85:19 95:4 113:4 116:11
25 129:7,13 130:2,11 131:5, wife 71:12 89:23
14 132:17,19,23 133:17 174:23 189:13 276:17
Winick 214:14,17 wrongdoing 47:22
134:10 135:6,13,21,25
136:16 137:5 138:2,5,10,22, wire 154:9 wrongly 112:15,19,25
25 139:6,14,20,21,22 wise 170:5 wrote 153:6 267:5
140:15,17 142:6 143:15,16 withdraw 60:4 Wurtzel 8:8,19 14:2,8 15:12
147:6,11 148:9,22 149:13, withdrawing 164:2 16:12 17:8,24 18:23 20:13,
20,22 150:5,19 165:3,8,9, 25 22:19 23:12,22 24:13
U.S. LEGAL SUPPORT

(877) 479-2484
09/24/2020 28
25:6 27:10,17 29:13 30:19, 208:3,4 220:14 228:9
23 34:6,12 35:10,24 37:4 277:17 286:9
42:3 43:8,22,25 50:16,21 York 7:13,16 9:9 10:20,22
51:7,11 53:7 54:2 55:3 45:21 104:11 196:12 288:3,
57:15 59:3,15,20 60:8 63:7 5
66:14,23 69:2 71:19 72:20
73:6 76:25 77:4,9,13,21
78:4 80:5,21 81:18 82:3,9 Z
85:6 86:3 88:14 90:22 94:25
96:13 106:2 107:8 109:5,12 Zoom 9:8
111:17 112:21 113:20
114:6,10 118:15 119:5
120:2,10 122:7,22 123:13
125:16,19 128:12 131:16
133:7,12 134:12 137:9,17
138:11 140:2,10 142:15
147:22 152:14,21,24 154:19
158:2,12 160:17 161:7,21
162:2,9 163:14,18,22
164:13,21 170:2 172:23
177:25 185:6 189:19 190:24
193:21,24 195:14 199:20
200:17 203:24 204:23
208:18 212:22 215:20,24
216:13,23 219:3,5,10,21
221:15 222:15 237:19,25
238:6,15,24 239:5,12,22
242:23 245:9 246:4 248:7,
10 249:3,18 252:7 254:12,
22 255:2 262:24 264:22
266:5 269:8,15 272:12
275:25 277:20 280:11
287:13
Wynn 100:8,24 101:4,16,23
102:9,14
year 11:10,13 12:6 13:13,16

38:17 50:3 74:13 130:13,20
131:6,14 132:22 133:11,21
134:19,21 135:7,13 146:24
156:3 181:16 228:15 246:10
285:9,21
year's 285:22
years 10:25 12:12 13:14
14:14 16:17,18,20,23 17:2
19:9,24 20:5,9,10 23:11,16
25:12 33:23 34:4,10 36:14
39:13 44:6 45:14 62:12
79:21 86:12 105:16 106:17
134:2,15 136:3,5,8,12
159:10 172:17 190:3 204:22
U.S. LEGAL SUPPORT

(877) 479-2484

Joe Schnaier Deposition

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Joe Schnaier Deposition

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FILED: NEW YORK COUNTY CLERK 07/16/2021 11:43 AM INDEX NO.

·2· ·SUPREME COURT OF THE STATE OF NEW YORK

·7· ·LIVEXLIVE MEDIA, INC., f/k/a LOTON CORP.,

15· · · · · ·EXAMINATION BEFORE TRIAL of JOSEPH

16· ·SCHNAIER, one of the Plaintiffs herein, taken

17· ·by the Defendants, pursuant to Court Order,

18· ·held via videoconference by all parties,

19· ·before Michelle Lemberger, a Notary Public of

20· ·the State of New York.

U.S. LEGAL SUPPORT

·4· ·SCHLAM STONE & DOLAN, LLP

·7· · · · JESSICA R. CATERINA, ESQ.

·9· ·LAW OFFICES OF STEVEN D. ISSER, ESQ.

U.S. LEGAL SUPPORT

·3· · · IT IS STIPULATED AND AGREED by and between

·4· ·the attorneys for the respective parties

·5· ·herein, and in compliance with Rule 221 of the

·6· ·Uniform Rules for the Trial Courts:

·7· · · THAT the parties recognize the of Rule 3115

·8· ·subdivisions (b), (c) and/or (d).· All

·9· ·objections made at a deposition shall be noted

10· ·by the officer before whom the deposition is

11· ·taken, and the answer shall be given and the

12· ·deposition shall proceed subject to the

13· ·objections and to the right of a person to

14· ·apply for appropriate relief pursuant to

15· ·Article 31 of the CPLR;

16· · · THAT every objection raised during a

17· ·deposition shall be stated succinctly and

18· ·framed so as not to suggest an answer to the

19· ·deponent and, at the request of the

20· ·questioning attorney, shall include a clear

21· ·statement as to any defect in form or other

22· ·basis of error or irregularity.· Except to the

23· ·extent permitted by CPLR Rule 3115 or by this

24· ·rule, during the course of the examination

25· ·persons in attendance shall not make

U.S. LEGAL SUPPORT

·2· ·statements or comments that interfere with the

·4· · · THAT a deponent shall answer all questions

·5· ·at a deposition, except (i) to preserve a

·6· ·privilege or right of confidentiality, (ii) to

·7· ·enforce a limitation set forth in an order of

·8· ·a court, or (iii) when the question is plainly

·9· ·improper and would, if answered, cause

10· ·significant prejudice to any person.· An

11· ·attorney shall not direct a deponent not to

12· ·answer except as provided in CPLR Rule 3115 or

13· ·this subdivision.· Any refusal to answer or

14· ·direction not to answer shall be accompanied

15· ·by a succinct and clear statement on the basis

16· ·therefore.· If the deponent does not answer a

17· ·question, the examining party shall have the

18· ·right to complete the remainder of the

20· · · THAT an attorney shall not interrupt the

21· ·deposition for the purpose of communicating

22· ·with the deponent unless all parties consent

23· ·or the communication is made for the purpose

24· ·of determining whether the question should not

25· ·be answered on the grounds set forth in

U.S. LEGAL SUPPORT

·2· ·Section 221.2 of these rules, and, in such

·3· ·event, the reason for the communication shall

·4· ·be stated for the record succinctly and