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Old 09-18-2012, 11:37 AM   #1
bazaro
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The Lederer Files Transcripts

I really hated the manner in which the interview was conducted, so I wanted to write out the text. Enjoy. You miss a lot from not watching the interview in terms of reactions by Howard to certain words and phrases, but overall the content is still there. Some grammatical errors and transcript is adjusted slightly, I'll fix it when I get the chance.


Part 1 of interview: http://www.pokernews.com/news/2012/0...oker-13429.htm

Introduction

1. Before we get to the heart of what I’m sure everyone is dying to know, why have you decided to speak publicly here today with Pokernews? Why has it taken you so long at this point to acknowledge the problems that have prevented Full Tilt customers from getting the money owed to them off of the site?

a. Well, first of all I want to thank you for having me, I look forward to this opportunity. I just think now is the time for the poker public to get some answers to questions they deserve to have answered. For them to get some facts that have obviously not been shared with them over the last 15 months. There were, as we’ll discuss going forward, very good reasons, why the company and the principals were not discussing the issues in public during the 15 months. Now that the deal has been completed, I think this is the time.

b. I would like to say one thing though before we get to the interview, I am one person, in what was a very complicated situation, so I don’t have all the answers, and I don’t have all the facts. I’m going to try my best here to offer the facts that I know.

The Birth of Full Tilt Poker

Howard commentary: Ray and Chris met right around 2000, maybe in 99. Chris did some day trading, Ray managed a day trading office in LA, they were very close friends. Chris understood how important it was to not just bring an investor not just with a checkbook, but that there would be value to the company if you brought in strategic investors, people that in his opinion that would become poker celebrities, that sort of mythical creature that maybe didn’t even exist yet, but that he could see was coming.

2. What were your first impressions of Ray Bitar?

a. Not, you know, he was Chris’ friend, I met him you know, in that capacity, we didn’t hang out I didn’t know him that well so I can’t say I had much of an impression either way. I didn’t know him either way. Certainly by the time I invested, Phil Ivey was already involved, he was invested, Rafe Furst, Phil Gordon, Perry Friedman, who was actually doing some programming for the site, I think he was working full time, and Andy Bloch. The idea was at this early stage only Ray’s money from the strategic investors, they were the only one’s allowed to invest in the company on September 4th, I was allowed to increase my stake, Ivey was allowed to increase his stake, Eric and John came in, I think on September 4th the company had 700k. With that money, the company was to try and move as far along in the development process of the software as it could get, just on that money before it saw any more.

3. Did players, people might make the right or wrong assumption that team full tilt were the original investors? With the members of team full tilt that were in fact investors, did they receive compensation as player reps or was it part of the investment deal to represent the site?


a. There was certainly, it was intended that 5% of company profits would be set-aside for the key endorsers, sort of a separate pool to recognize that they were something extra. The major new investors got a discount to buying-in, and they would be able to buy a share. Again, attract and certainly in the early years economically promote the company.

b. The company was formed as a California LLC, there are members (another name for owners), they own shares, I’m not share if LLC can have class A or, everyone has shares, very clearly it was controlled by all the people who owned the company. Anything about the company could be changed by a majority vote. There was at least one place were 2/3 vote was required, to remove a board member abruptly, during a duly elected term, board members were supposed to be elected to 1 year terms. But everywhere else, electing boards on an annual basis, that was by majority vote, anything about the operating agreement itself, if there was anything about how the company was structured, duties, it took a simple majority vote.

c. The original elected board:
i. Ray Bitar
ii. Chris Ferguson
iii. Perry Friedman
iv. Phil Ivey
v. Howard Lederer

4. “Early on it was clear it’d be hard to get Ivey on the phone for a meeting, so he stepped down.” Rafe Furst take a board seat the next year, and Perry Friedman stepped down before 2006. Although the operating agreement called for a new board to be elected each year, elections did not take place due to a lack of shareholder interest in taking board seats. – notes

5. Did you receive a salary specific for your role as manager or President of tiltware?

a. I think for the first couple of years I didn’t receive a salary, there was a promise of equity if the company did well. We saw our role in the company as an advisory board, we are not professional board members, we are not professionals or CEOs like the board of Apple, our job was to get on the phone with management, discuss the company, there was no expectation the board would be operating day-to-day. There was nowhere in the operating mandate, that the board should, ever conduct outside independent forensic audit of financial figures that management provided.

6. Poker is a game based around cash, objective of one player is to win his opponent’s money. The player sitting at the table, the cash is there, there is security, starting an online poker room, the idea must have been prominent of the company finances, the safety of player deposits, the industry is in its infancy, the idea of what we know now may not have existed. Talk to me about the early financial discussion, the processes, the people hired to license and run the financial side.

a. First was to get a license, so we got the first license from Kawanakhe. Ray was CEO so he was the one who really dealt with all the licensing. It was a lot of work, anytime you’re going through a licensing process. It was something he and the company counsel handled. We haven’t even launched yet, until July of 2004 (right after World Series). We had brought in some new members into the LLC who had invested and raised more money. When we launched, we had over 2 million in cash, you know to launch marketing, to start development team, maybe 2.5 million. CFO hired was Alan, he was really good, I liked him. There were, you know, Kawanakhe was regulating the site, there was certainly no talk of distribution or anything like that. I think Alan would provide financial statements on occasion the board would go over with Ray. They hadn’t been seizures, this was 2004, the company was starting to go public, (2005), rumblings that the company is moving toward that. Didn’t seem like that there were going to be these types of issues, seizures.

7. Were their multiple bank accounts, how were player funds held in these first initial stages? Player deposit coming through, do you recall procedure, the break down

a. Nope. I just don’t know. It just wasn’t, company was strong, reports looked good, there was not this idea of segregated trust accounts, it just wasn’t anything of a real concern.

8. How vested did it seem the other shareholders were in the operations, the problems, any potential concerns, did anyone kind of have reason or bring in problems that they wanted to be included or be heard?

a. There was always, you know the company, the members didn’t always get along, certainly there was a group of owners that didn’t like Ray, didn’t think he was doing a good job, would have liked to see him removed, there was never a serious attempt to do this at the member level, which was certainly possible. We would get emails from members about strategy, there’s this great new bonus strategy at this other site, we were getting suggestions, was not smooth sailing of member relations.

9. Story published by wicked chops, where contacted number of full tilt employees, one of the stories was centered around John Juanda bringing concerns of customer service to both you and Ray. Former business associate said that and I quote “John you can’t tell us how to run this company, you are an owner and nothing else, you don’t run the company, so just **** off”. Conversation ray and you had with Juanda, but no attribution. Any recollections of this encounter?

a. Well I mean, John was a vocal owner in the anti-Ray Bitar camp, so I have no reason to not believe that conversation happened. One conversation long time ago, I have no recollection, certainly John Juanda was not a Ray Bitar fan.

10. You are an owner and nothing else, there is something about the way that was presented?

a. Well there is also an implied, if you want to be an owner, toss Ray Bitar out by getting a coalition of 51%. Owners had one responsibility, to elect a board, if they didn’t like the direction of the company or who was running the company, they had a remedy.

11. Speaking of ray, within the same article, some of the full till employees associates say that (Ray was) not experienced, no leadership aura, basically illiterate, did you feel that ray was qualified to be the ceo of full tilt poker

a. Qualified, not in any traditional sense, he had passion for the company, he didn’t have an MBA degree certainly not, from education level bringing experience, didn’t bring education, but he was also an owner, very invested in the company, brought in to run the company by Chris, Chris’ friend, and in a lot of areas, he was doing a good job. A lot of people didn’t like him, a lot of people liked him, not hard to write a story like that

12. You talked about John and the coalition that didn’t like Ray, source that Perry was raising some red flags that the company was getting too big and too complex and that at the end of the year meeting in 2006, and called for a vote for to remove Bitar. Was there ever a vote to remove Ray as CEO?

a. Its certainly accurate that Perry more than any other member did not get along with Ray, he had left the company as his role as a programmer, due to his clashes with Ray, soon thereafter he resigned, certainly accurate that he wanted some members removed.

Shareholder Distributions


1. 443, 865, 529,89. That’s a pretty staggering gross total number. For the folks who don’t know what that means, that’s the whole number reported by DOJ of distribution to shareholders. Where the inception of the shareholder distribution talk, the first talk of distributing profits to shareholders? First person to request distribution.

a. Membership was very patient initially, and, I think there may have been discussions, I am speculating now, maybe 2006 maybe 2005, the company was growing and re-investing, so I don’t think we ever really got close to distributions until they got started which was spring of 2007 april I believe, so I don’t know if it was any one person’s particular idea, the company had a lot of excess cash, a good 20-30 million in excess cash, that it did not need, good member discussion, board determined it was time to consider and talk to members about distributions. I can tell you that there is one person amongst the membership who was always very anti-distributions, never wanted them in the first place, always argued that every single distribution made would weaken the company, and that was Chris Ferguson. He didn’t use for or care for the money. He is the opposite of greedy. Once the money started rolling in, I remember visiting him in his house, 1500 sq ft house in a regular vegas neighborhood, wasn’t a big spender that way, ultimately his African charity, he thought distributions were a really bad idea, in hindsight, he was absolutely right.

2. Was there a clear distinction and a need to be careful w operating capital, the accounts of distribution, accounts of salary, accounts that player deposits are being held in? Is there a conversation or methodology for differentiating between accounts?

a. I would say no. again, it wasn’t my area, I am not a financial guy, I am not an accountant. I was shown a general balance sheet, such that I was very confident that we had cash excess of customer deposits when distributions were being paid. I don’t thing regulator was demanding that, poker community wasn’t demanding that, company wasn’t, I know looking back on it it sounds bad, but from every owner down, people were pushing for distributions, but no owner would have wanted distributions if the cash was in excess of player balances. Completely unfair to characterize owner’s as, you know, greedy, just wanted a money grab and to take the player’s money, absolutely not true.

3. As far as you knew, all shareholders were informed that their distributions weren’t coming from accounts that held player fund

a. No. I wouldn’t say at any time in the company’s history, that these were the player accounts, this is the processing account, this is the account, if these accounts had more money than the player accounts it was okay. Regulator was okay for it, it seemed reasonable to the owners and the board.

Full Tilt Poker Moves to Dublin, Ireland


“The decision to move had nothing to do with potential legislation, and everything to do with our intention to float on the London exchange somewhere…”

1. Once the company moves to Dublin, and once you mention that you spend a significant time there, is there any way that Ray being in Dublin, without you, not in the same time zone as you in Vegas. Thoughts of isolating him in running the company

a. When we were 100 strong in LA, I was there 60-70% of the time, I had a good influence of company culture, I lost control of that in Dublin. I wasn’t happy about it, I couldn’t have prevented it, because when you move to a new country, you have to abide by the morays of that society in terms of how hard you can push certain employees, the hours you can expect, your management style. How employees are hired and fired. Something weird happened, I don’t think that I have ever had this conversation, but at same point an employee said I had to talk to you. Boy, I really think there are some problems here, there are frictions between US and Irish, you know, I just hadn’t seen any it, maybe I was losing touch, maybe it was too big to me, in terms of number of employees, I was so laser-focused on software and marketing, that was an overwhelming amount of time, whole another part of the company that was now becoming really hard work and that was sort of game and promotion part, internal marketing, that features you offer and customers want, promotions, like Iron man, coming up with promotions like that that people enjoy, I was so wrapped up in stuff like that, I lost touch, I lost total sense of the whole thing. On the other hand, Ray had a pretty good handle on it.


Transcript, Part 2:

https://forumserver.twoplustwo.com/sh...9&postcount=20

Last edited by Kevmath; 09-18-2012 at 04:10 PM.
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Old 09-18-2012, 11:42 AM   #2
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Re: Lederer Files Part 1 Transcript

Thanks for all the work.
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Old 09-18-2012, 11:48 AM   #3
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Re: Lederer Files Part 1 Transcript

Quote:
Originally Posted by bazaro View Post
b. I would like to say one thing though before we get to the interview, I am one person, in what was a very complicated situation, so I donít have all the answers, and I donít have all the facts. Iím going to try my best here to offer the facts that I know.
Still reading this (thanks for the transcript btw) but the quoted bit from howard annoys me already, and it's sure to be the line everyone interviewed gives. If Howard didn't know, then who?

The way all these guys just "don't have all the facts, because it's complicated" just baffles me. Who's running the ship over there? Jimmy Hoffa and Amelia Earhart?
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Old 09-18-2012, 11:53 AM   #4
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Re: Lederer Files Part 1 Transcript

Thanks for putting that together
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Old 09-18-2012, 11:57 AM   #5
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Re: Lederer Files Part 1 Transcript

any idea how many parts there are and when they are being released?
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Old 09-18-2012, 12:00 PM   #6
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Re: Lederer Files Part 1 Transcript

TY, stranger.
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Old 09-18-2012, 12:06 PM   #7
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Re: Lederer Files Part 1 Transcript

He makes some good points here
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Old 09-18-2012, 12:10 PM   #8
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Re: Lederer Files Part 1 Transcript

Quote:

5. Did you receive a salary specific for your role as manager or President of tiltware?

a. I think for the first couple of years I didn’t receive a salary, there was a promise of equity if the company did well. We saw our role in the company as an advisory board, we are not professional board members, we are not professionals or CEOs like the board of Apple, our job was to get on the phone with management, discuss the company, there was no expectation the board would be operating day-to-day. There was nowhere in the operating mandate, that the board should, ever conduct outside independent forensic audit of financial figures that management provided.
I just wanna know how he figures that independent audits relate to his salary?

Sooooooooo sketchy just randomly mentioning that there. It's like he was coached to mention that in the interview somewhere but then just sticks it in the completely wrong spot.
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Old 09-18-2012, 12:23 PM   #9
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Re: Lederer Files Part 1 Transcript

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Originally Posted by lillou View Post
Thanks for putting that together
+1
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Old 09-18-2012, 12:30 PM   #10
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Re: Lederer Files Part 1 Transcript

ty
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Old 09-18-2012, 12:37 PM   #11
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Re: Lederer Files Part 1 Transcript

How much do you think the Venetian paid to pokernews?
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Old 09-18-2012, 12:39 PM   #12
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Re: Lederer Files Part 1 Transcript

Quote:
Originally Posted by starvingwriter82 View Post
If Howard didn't know, then who?
Looks like the singular spotlight will shine on Ray. I expect all future interviews from all the LLC members to point a crooked finger at Mr. Bitar.
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Old 09-18-2012, 12:42 PM   #13
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Re: Lederer Files Part 1 Transcript

The interviewer's questioning style is pretty poor. He rambles, combines unrelated questions, and is generally indirect.

As for Howard, he seems about like I expected... thoughtful and careful. We'll see how he handles some of the tougher questions later in the story.
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Old 09-18-2012, 12:42 PM   #14
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Re: Lederer Files Part 1 Transcript

Quote:
Originally Posted by ajt8 View Post
I just wanna know how he figures that independent audits relate to his salary?

Sooooooooo sketchy just randomly mentioning that there. It's like he was coached to mention that in the interview somewhere but then just sticks it in the completely wrong spot.
Doesn't seem sketchy to me at all. I mean, if he honestly didn't know some of this stuff, one of the first questions people will ask is why the board didn't have independent audits.

Edit: I have no opinion yet on if I believe him - but its a totally believable scenario that the board wasn't expected and didn't act like a professional board. For better or for worse.
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Old 09-18-2012, 12:43 PM   #15
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Re: Lederer Files Part 1 Transcript

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Originally Posted by Rob999 View Post
Thanks for all the work.
+1
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Old 09-18-2012, 12:43 PM   #16
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Re: Lederer Files Part 1 Transcript

In combination with the Andy Bloch interview over at Diamond Flush the other day, it seems as though Ivey will not come out of this looking very good at all.
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Old 09-18-2012, 01:01 PM   #17
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Re: Lederer Files Part 1 Transcript

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Thanks for all the work.
+1
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Old 09-18-2012, 01:04 PM   #18
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Re: Lederer Files Part 1 Transcript

Part II Out: http://www.youtube.com/watch?v=2DxUJ...layer_embedded

Transcript for II will be typed ASAP
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Old 09-18-2012, 01:32 PM   #19
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Re: Lederer Files Part 1 Transcript

Lets get a group of friends and aquaintances together and start a company. Lets get someone illiterate to be CEO. Lets hand out playmoney in change of cash. Lets refer to the balance sheets when we steal and questions are asked. Or just say "I don't know"
U.S of A!!
I couldn't watch all of the interview, It is sickening.
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Old 09-18-2012, 01:45 PM   #20
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Re: Lederer Files Part 1 Transcript

Lederer Files Part II


Part 2 of interview: http://www.pokernews.com/news/2012/0...ment-13432.htm

UIGEA Signed onto Law

1. On October 13th, 2006, Bush signs the UIGEA in 2006, “prohibits gambling business from knowingly accepting payments in connection of participation of another person in a bet or wager in the internet that is unlawful in federal state law” When this bill get signed, when is the first time you hear about this and the ramifications for business?

a. I think it was some time during the day of September 29th, someday on the afternoon that it was going to be attached to the bill. It was a shock.

2. Party Poker pulls out of the market, it was rather swift in terms of company making quick decisions to move out of the market. Pokerstars and Full Tilt Stay, what goes in company decision to say?

a. Well look, I, uh, it was a pretty simple process. We knew that just because Party Poker left that it was not the correct decision or that we were the same as Party. They had offered a lot of different types of games, Pokerstars and Full Tilt had never done anything other than poker. We did not want a rash decision, we sought legal opinions, I assume stars did the same thing, we scoured the strip malls, there are great gaming attorneys in vegas, we really had to look at the law and what it had to say about poker. The law didn’t say anything about poker. We were then left with what should interpreted about the law for poker, tough for a laymen to me, didn’t seek opinions to the contrary, what we did in our business, we got legal opinions, they were all unanimous UIGEA did not cover poker

3. Pretty major decision, was there member vote?

a. There was no need for member vote because no members suggested we leave. There was zero struggle, it was not unanimous, as we mentioned earlier Perry Friedman and John Juanda and that situation before, there was zero struggle. And look any member that believed it was a bad decision, they could just leave. And no one did.

4. Biggest hurdle post UIGEA was payment processing, financial transactions between players, how did the system change from 2006-2007 and who was in charge of the company’s payment processing at the time, how aware were you?

a. Payment processing wasn’t a part of my daily duties, I know there was a change where from 2006 the only ACH processing was netteller, instant deposit product, might have been back in 2005, it went from there, and after UIGEA, there were different processors offering ACH. I would hear about them here or there, it wasn’t my area, whenever I had about a new payment processor, I was assured by Ray and company counsel that these processors that these payments were transparent.

5. To your knowledge was there a secure background change to the company of the various payment processors

a. I don’t know, I don’t know, I assume there was some vetting but I would be speculating. That’s all I would say at this point, I was always told that these actions were transparent. Another fact in April 15th, I was talking to Ray, and Ray said that all the banks were transparent. He opened a drawer, he had a letterhead from the bank that the bank legal opinion was that it was legal, but that the processing was legal. That’s all I know about that particular relationship. I found about it after the fact, I was always told it was transparent, and I was shown it.

6. In regards to banks, it was stated in the indictment against Ray and Nelson that the company developed relationships with banks on the verge of failure, invested in banks as a fee to turn a blind eye

a. No, I don’t think full tilt invested in any of these banks, I’m unaware of this, I disagree with this characterization

7. Can you talk at all about Daniel Tzvetkoff?


a. Never spoken with him, no recollection of him, nothing to say about him

8. Eventually he becomes one of the people turned on Full Tilt, taking himself out of harm’s way by revealing information he had about full tilt

a. Never met with a payment processor my entire time at the company, I remember one time at a party, Ray said he’s processing with us, I said hi. That wasn’t what I did, I didn’t meet with any of these people

9. Did you know that Tilt was going to sue Tzvetkoff?


a. Yeah, I knew about that.

10. Eventually, rumored that Tilt tipped off that he was in the United States to the FBI and that he was influential in having him arrested

a. Might be the case, I don’t know

11. March 17th 2008, according to DOJ indictment against Bitar, customer emailed Full Tilt, “very concerned about risk of depositing money, is money that I have in my account in trust.” Next day customer service rep forwarded it to Rep and CCed co conspirator #1. Did you receive this email, are you co-conspirator #1?

a. I am not going to confirm or deny who Co conspirator 1 was. I did get that email, and I can confirm it was important to me. It wasn’t my area, I hadn’t given it a lot of thought, by March 2008 I knew I was going to resign by September. It was a question that I wanted an answer to, not the actual question, and I knew the answer to the question, it was important company provided answer and good service to the question. I think I just responded with something like, we need to provide this customer a good answer to this question, I’m not sure

12. Who was in this process?


a. Mostly company counsel, I was certainly aware of balance sheets, in terms of cash coverage, but I had never seen a document that just answered that question. Do we have more cash in company accounts than we have in player liability? A balance sheet is a balance sheet, that’s a difference question. I asked the finance department to answer this specific question. I don’t recall exact dates, an answer was provided to the customer a few weeks later.

13. Ray responded to customer service at first saying that the best we can say that 100% of funds were segregated, would be available to players 24/7 after reasonable fraud check. “The best we can say”, doesn’t insinuate to me, not feeling too good at the validity at that point of the financial segregation of accounts, if Ray is saying the best we can say

a. Look, I believe, that statement was correct at the time. When he is saying that, he is referring to the customer question about trust accounts, didn’t give any indication that there was a trust account to the customer. Easy to take that email out of context, all I cared about was to provide that customer a correct answer, I had confidence it was the correct answer

14. We are 5 years past the formation of the company. It seems this is one of the most important moments of whether the company is being handled,

a. I don’t know. I’ve never seen the question. I just know that email came across my inbox, might be an email, I’m doing so many things with other areas of the company. I saw the email as something important to the company, March-April timeframe I endevaoured to have the company financial department to produce a document that could answer the fundamental question, that could answer the question, do we have the cash on hand that liability, wasn’t easy to produce wasn’t easy for finance department, they never had to do that document. By early summer 2008, that it was being produced on a weekly, monthly basis

15. Did the AGCC mention, you mentioned the finance department had difficulty putting it together

a. This is a specialized document, there is a balance sheet and this thing, they had never been asked to do this

16. You were not a key license member of the AGCC, so you might not know, but what transparency was Tilt giving the AGCC when trying to cross check whether Tilt has player funds?

a. Kawanakhe was our regulator in 08, you have our times off. I recently read the Alderney report, it mentions that the license held in 2007, I do not know what that license is. The 2007 license might have just been for UK. Interviewer: Still, so the idea that the first time that an executive team is doing and having difficulty in putting the numbers together and would set off a red flag that I would potentially be something weneed to pay attention to

b. Well I wanted it produced and the document to be accurate. I wasn’t a key license holder to Kawanakhe or Alderney, I never talked to them, I do not know what compliant procedures there were, but uh, there were reports that were being furnished to those regulators, I don’t think or certainly I don’t think the finance department would have an easy time reporting that, I’m sure Kawanakhe asked for balance sheets on a regular basis, but I don’t know about cash coverage reports

17. The email chain goes back and forth, the Full Tilt customer service responds, customer asks for further clarification about segregated accounts that can’t be used by company. Revied by Ray, who approved the draft: player funds are kept in several deposit accounts, separate and distinct from operating accounts, funds are transferred from player accounts to FTP accounts after FTP has earned those funds. Not done each time earned by rake or daily, but as earnings accumulate, we make periodic transfers from deposit accounts to operating accounts, from which we pay outside expenses, full tilt employees, and ultimately shareholders. For me, it is a well thought out and well written email, talks about safety about player accounts, and describes payment process. Was there ever a time to your understanding that this process was not used or were you aware that this conversation of process of depositing…

a. I don’t recall that particular email, I didn’t see that, it seems like an odd email, probably accurate in 08, it seems like an odd email, I don’t know, I don’t think so, it seems like an odd email to me. In its level of detail, that’s what a poker company does, as long as you have an operating account that the money goes into the operating account you pay expenses and the audit reveals that you have more money than in all the other accounts, it just seems like an odd email

18. On March 23, Ray emails CC1 and FTP General Counsel, “this is a good filler response for the 1 or 2 people who email the company a month. Customer funds will always be at risk. We are not a bank.” How does that statement when a CEO kinda to me, that doesn’t seem something I would be comfortable with, working or trusting, a guy who says that my funds were at risk

a. I don’t believe that was what he was saying. He was saying, maybe the DOJ, it was possible, it is not like a bank with FDIC insurance, it is possible the company gets shut down and the DOj seizes the company

19. So you don’t think he is inferring about operating using company funds

a. I don’t think so

20. Who had access to the documents listed


a. It was the accounting team, I don’t know. They would gather all the information necessary to produce the report

21. When you review the document and the numbers, is there a system of checks and balances, we are going to go forward and trust that this is true.

a. I made it clear I know what I want to go into this report. I’m not a trained accountant I wanted to make sure the numbers I’m looking at were accurate. It was explained to me, and then there was this report, I had no reason not to trust the report.

Lederer Retires from Management but remains on Board


Final decision to leave was in fall of 07, I had initially agreed to work for two years, and then I believe I agreed to 3 more, but I’m not sure of that. I know that uh, I’m not even sure what my contract was, or if I had a contract, but uh, I know that I hadn’t made a commitment beyond September of 2008, we had thought about work at the company in terms of years. At same point in the fall, in the fall of 2007, it was time to move on. The initial response, I think, from the board, was to find a Howard replacement, a COO person, go out snatch a top level executive at a gaming company or someone else with a lot of experience who can take the role below Ray, the conversations were more along the lines of someone who truly had experience handling the company of the size, that was the concern, the size, the structure, the different departments and keeping it all working and functioning smoothly and maintaining a decent corporate culture. Ray brought in a lot of senior manages, some good people, some people with experience in the industry, that the company started to grow up from a management process point of view, definitely some good people were brought in, but I obviously regret that there was never, that the company never brought that level person

1. Would you say due to the circumstances, the way things went, that Ray and you felt handcuffed to the board?

a. Yes, Ray more than me, I wasn’t saying I want out, this was Chris’ baby, he was chairman, wasn’t going anywhere, Ray was CEO wasn’t going anywhere

2. Did Ray express concern that you were leaving, the idea and chatter that he could be ousted

a. I don’t, I mean of course people like to feel comfortable with the people who are sort of providing the oversight, I guess you would call it, I don’t think that Ray would have been thrilled if John Juanda or Perry was elected, but constructive conflict is good. Where we mis-stepped as a board and membership, so obvious looking at it now, my greatest regret in all of this, is that we were operating as a California LLC, we’re a Dublin company, but that the ultimate ownership of the LLC, and we’re using an operating agreement in 2003, that was our inexperience, our laziness I guess.

Last edited by Kevmath; 09-18-2012 at 02:21 PM.
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Old 09-18-2012, 01:50 PM   #21
playertee
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Re: Lederer Files Part 1 Transcript

Does anyone have access to the video?
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Old 09-18-2012, 01:53 PM   #22
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Re: Lederer Files Part 1 Transcript

Quote:
Originally Posted by jjshabado View Post
Doesn't seem sketchy to me at all. I mean, if he honestly didn't know some of this stuff, one of the first questions people will ask is why the board didn't have independent audits.

Edit: I have no opinion yet on if I believe him - but its a totally believable scenario that the board wasn't expected and didn't act like a professional board. For better or for worse.
It's certainly not a requirement to have them. Many private companies do opt to have their financials audited by an outside firm, though. It is odd that they chose not to have them while in the same conversation he talks about going public. But those discussions may have been just talk.

The thing that is off with him mentioning this is that it's so far reaching from the original question. It has nothing to do with his salary. Or what was expected of him as a director.

The only reason it's believable that he just decided to mention that before the questions came at him is that he uses the word forensic, which doesn't really belong there and leads you to believe he knows nothing about the benefits of an independent financial audit. Who knows if that is true.

Also on another note, with the logic you have presented it does correlate to how Howard early on is answering additional questions and providing additional information by himself. However, the farther it goes into the interview the answers continue to provide less and less actual information. I think once he knew the interviewer was going to let him get away with a few 'I don't know''s and 'That wasn't my department' type answers, he started using them more frequently.

It's just part one.. Can't wait to hear what else this schmuck has to say.
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Old 09-18-2012, 01:57 PM   #23
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Re: Lederer Files Part 1 Transcript

Quote:
Originally Posted by playertee View Post
Does anyone have access to the video?
Both of them are on pokernews. And they have been posted in the above post
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Old 09-18-2012, 01:58 PM   #24
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Re: Lederer Files Part 1 Transcript

I'd like to change the title of the thread to Lederer Files Rough Transcript, how I would do such?
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Old 09-18-2012, 01:59 PM   #25
AnyTwoWillDo
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Re: Lederer Files Part 1 Transcript

Watch the video, just to witness the dooshbagery
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