STATEMENT FROM FRED WILPON, CO-FOUNDER AND CHAIRMAN, AND SAUL B. KATZ, CO-FOUNDER AND PRESIDENT OF STERLING EQUITIES, ON BEHALF OF THE STERLING EQUITIES PARTNERS AND THEIR FAMILIES

Dear Mets Fans:

Following days of leaks and press speculation, the Court – with the agreement of the Sterling partners – has released the complaint that was previously filed under seal.

The Trustee’s lawsuit is an outrageous “strong arm” effort to try to force a settlement by threatening to ruin our reputations and businesses which we have built for over 50 years. This is a flagrant abuse of the Trustee’s authority and we will not succumb to his pressure. The conclusions in the complaint are not supported by the facts. While they may make for good headlines, they are abusive, unfair and untrue. We categorically reject them. We should not be made victims twice over – the first time by Madoff, and again by the Trustee’s actions.

The plain truth is that not one of the Sterling partners ever knew or suspected that Madoff ran a Ponzi scheme. Because the Trustee has no evidence to support his claims even after a year-and-a-half review of over 700,000 pages of documents and many, many hours of depositions, he has created a claim that we “knew or should have known” that Madoff was a fraud. Why should we “have known” when the SEC and other government agencies that had oversight responsibilities did not know? In fact, the SEC reported that Madoff was above board and legitimate, even after it investigated him many times. Madoff was not a hedge fund, but an SEC regulated broker dealer and like millions of other Americans, we trusted the brokerage statements we received. The Trustee is suing not only for what he defines as “fictitious profits” but for monies that we deposited with Madoff over almost 25 years. That is outrageous, unfounded and inconsistent with the law. Let us be clear, the Trustee is attempting to seize money originally invested with Madoff, which was earned from the Sterling businesses.

The Trustee also alleges that we were blinded to Madoff’s crimes because our businesses “depended” on the returns. That is complete nonsense. We have good, sound businesses that were successful years before we invested with Madoff, including both real estate and the New York Mets. Those businesses never depended on returns from Madoff.

Our previous statements

All of the public statements we have issued to date have been accurate and true. We said when the fraud was first disclosed that the losses we suffered in the Madoff scheme would have no impact on the operations of the New York Mets and that was true. At the time, we could not have anticipated that a trustee would file a lawsuit seeking to recover hundreds of millions of dollars in addition to the substantial amounts that Madoff had stolen from us.

As we announced last Friday, we are now seeking one or more strategic partners in the New York Mets specifically because of the uncertainty created by the lawsuit filed by the Trustee in the Madoff bankruptcy.

We thought that Madoff was a friend for 25 years. That is why his betrayal was so painful. Each of the Sterling partners and their families invested with Madoff in good faith right up to the day his crime was exposed. We were as shocked as the rest of the world when the money in our accounts vanished along with the billions he swindled from thousands of other innocent people.

In summary, we are proud of what we have built and achieved as a family. We have worked very hard for our entire lives, always with character and integrity. We will not sit still while the Trustee or anyone else makes these outrageous and irresponsible allegations. People who know us know the truth about who we are and what our life’s work represents.

Again, we have done nothing wrong. We played by the rules. We abided by the court order not to discuss the lawsuit. Others did not. We are confident we will win in court.

Complete coverage at mets.com »

________________________________

STATEMENT BY ROBERT B. FISKE, JR., KAREN E. WAGNER, AND DAVID L. CAPLAN OF DAVIS POLK & WARDWELL LLP ON BEHALF OF THE STERLING DEFENDANTS

Following days of leaks and press speculation, the Court, with the agreement of the Sterling partners, has released the complaint against our clients that was previously filed under seal. While the heated rhetoric in the complaint may generate headlines, it is not supported by the facts, the law, or the extensive discovery record developed by the Trustee before he formulated the complaint – numerous depositions and over 700,000 pages of documents provided by the Sterling partners over the last year and a half.

The bottom line is that the Sterling partners were innocent victims of the Madoff fraud, and the Trustee’s massive discovery effort did not uncover one shred of evidence to the contrary. Nevertheless, the complaint further victimizes the Sterling partners by arguing that they “knew or should have known” that Madoff was a fraud and therefore are somehow liable for amounts beyond their very substantial losses. This suggestion is false.

With regard to the complaint:

The complaint appears to contend that, because the Sterling partners are wealthy and successful individuals, they should have known Madoff was not trading any securities and was engaging in a Ponzi scheme. Yet the Sterling partners had over $500 million in their Madoff accounts at the time of his failure – some put in only days before – and all of it lost. Anyone who knows Fred Wilpon and Saul Katz knows that they would not have dealt for one minute with someone they thought might be engaged in fraud. Moreover, as a matter of elementary common sense, no rational person who thinks his broker might be a fraud would leave such a substantial sum with him.

Contrary to what the Trustee asserts, the returns on the Sterling-related brokerage accounts were not “staggering,” “easy money,” or “too good to be true.” The $300 million of profit alleged in the complaint, even if accurate, would not be “staggering” or extraordinary when viewed in the context of the amount of principal invested over the past 25 years.

In addition, the $300 million claimed in the complaint reflects only those accounts that the Trustee has selected for inclusion because they were profitable. It ignores numerous accounts that, in the Trustee’s parlance, were “net losers,” which, according to our clients’ analysis, total approximately $160 million.

Madoff investments did not “fuel” our clients’ operating businesses. The Sterling partners’ wealth was generated by their hard-earned success in real estate, sports, media, and other businesses – not by investments with Madoff.

The complaint also ignores the fact that Madoff was viewed as a person of considerable stature in the financial community. He had been the chairman of the board of directors of NASDAQ, a member of the NASD board of governors, and a member of the board of what now is SIFMA – an eminent figure in the investment world. He also partnered with prominent financial institutions to create Primex, an electronic auction trading system that was approved by the SEC and adopted by NASDAQ. Moreover, the Sterling partners knew, and relied upon, the fact that the SEC – the federal agency charged with uncovering and prosecuting fraud – had investigated Madoff and taken no action against him.

For 25 years the Sterling partners saw nothing to indicate that Madoff was not trading securities as he was reporting he did. Moreover, the partners took legitimate comfort from the fact that numerous highly regarded and sophisticated lending institutions readily accepted their Madoff investments as security for multi-million dollar loans.

The Sterling partners’ dealings with their broker were entirely lawful. While the Trustee calls payments made to them “fictitious profit,” he ignores a large and consistent body of state and federal law that permits a customer of a registered broker dealer to rely on statements he receives from the broker – and which imposes no investigatory obligation upon a customer who in any event would have no way of confirming what the broker was doing. Payments made in connection with those statements are lawful. Our entire system of customer dealings with brokers is structured so that customers receive, and rely on, their account statements and confirmations. Any suggestion to the contrary is simply incorrect.

The complaint appears to argue that the partners should have known that Madoff was a fraud for three principal reasons:

First, they were friendly with Madoff and could have asked him if he was engaging in a fraud. Neither the law nor common sense supports such a proposition.

Second, in 2002 the partners diversified their securities investments by establishing a new company to be run by Peter Stamos. The Sterling partners were investors and had no role with respect to investment decisions. Nonetheless, we understand the complaint to contend that, because two of the partners were involved in the selection of Mr. Stamos and the establishment of the fund, they became expert in market trading, hedge fund due diligence, and broker dealer regulation, and, therefore, if people said things to them like “I don’t know how Madoff does it,” the Sterling partners should have realized that Madoff was doing no trading and running a Ponzi scheme. Thus, the theory of the complaint appears to be that comments of this type should have led the Sterling partners to reach a conclusion that the SEC, with the benefit of substantially more information, trained fraud investigators, and subpoena power, did not reach. Similarly, we understand the complaint to claim that, because Merrill Lynch, when it acquired part of the Stamos company in 2007, would not permit investment with managers employing “black box” or other similar strategies, the Sterling partners should have concluded that Madoff’s registered brokerage operation was fraudulent. In fact, many people invest with managers using such proprietary strategies, which are entirely lawful. That Merrill Lynch decided not to means nothing.

Third, the complaint suggests that, because Sterling Stamos had invested in the Bayou hedge fund, the Sterling partners should have realized that Madoff was a fraud. Again, the proposition is wide of the mark – the partners had no involvement with the Bayou investment, and Bayou was a completely different situation. Bayou was a hedge fund. Madoff’s brokerage entity, on the other hand, was a registered broker dealer, regulated by the SEC, that issued statements reflecting trading for customers.

The complaint is further undercut by another fundamental fact not mentioned by the Trustee: if the Sterling partners had thought Madoff might be engaged in a fraud – a conclusion they never reached – their recourse would have been to go to the SEC, the watchdog that licensed Madoff and that is there to protect customers. This would have been a futile exercise. As we know now, the fraud would not have been uncovered.

The complaint, in our opinion, is an unwarranted reach by the Trustee. The Sterling partners lost more than money in the Madoff fraud – they lost faith in someone they thought was a trusted friend. But their faith in the legal system remains strong, and we are confident they will prevail.

They are batting .228 with RISP, .185 with the bases loaded. Tonight they are 2-11 with RISP alone. Reyes (.314 slugging percentage) Manuel’s go-to guy in the third hole has just flown out twice with men on third.

Here’s a great stat in 1,242 plate apperances this year, they have left 232 men on base. Whether this is encouraging or not they have only grounded into 18 double plays. Take that for what it is.

Tonight they got on base with the first at bat 6 times in 8 innings as of writing this, but only have 2 runs against the Nats, the Nats!!! 12 hits, 2 runs as of now. I know I’m rambling but I had to rant. For a positive, seeing Wright get two opposite field doubles has been nice.

Mets designated first baseman Mike Jacobs for assignment.
Signed to a minor league deal this offseason, Jacobs had a golden opportunity to seize the starting first base job in New York after Daniel Murphy went down. Instead, he hit 208/.296/.375 in 24 at-bats, some of which came in the cleanup spot, where Jerry Manuel started him on Opening Day. The guess here is that Ike Davis is about to receive a promotion, leaving Jacobs, likely to clear waivers with the way he has played the last two years, the starting first baseman at Triple-A. His days as a starter in the major leagues appear to be over. Thank god.

Maybe I’m just excited for baseball and that summer is on it’s way but damnit I’m excited. LETS GO METS!

.

.

1. CF Angel Pagan

2. 2B Luis Castillo

3. 3B David Wright

4. 1B Mike Jacobs

5. LF Jason Bay

6. RF Jeff Francouer

7. C Rod Barajas

8. SS Alex Cora

9. P Johan Santana

Well obviously Reyes will be at the top of the order when he come back, basically my biggest gripe is Jacobs batting fourth.  yes he has a big bat but also has the penchant for hitting .220.  Now with Wright, Jacobs, Bay & Frenchy you are looking at a good 400 K’s.  But at least with Wright & Bay you have .300 hitters.  Really there is no reason that Bay shouldn’t be protecting Wright or the other way around.  When Beltran comes back you know he slides into the 4 hole, and that could be a great 1-2-3 punch.  Personally when Beltran comes back I would do this:

1. SS Jose Reyes

2. CF Carlos Beltran

3. 3B David Wright

4. LF Jason Bay

5. RF Jeff Francouer

6. 1B Mike Jacobs

7. C Rod Barajas

8. 2B Luis Castillo

Now I know there is talk about lefty, righty matchups but I say screw that.  get your best hitters up there and let them have at it.  Let’s be honest I don’t think the Mets are going to be in too many 1-0 ballgames.  And the reason for batting Beltran second he can utilize his speed and not ask him to do too much in the power department.  Let him move Reyes over and he has a real patient eye and gives Reyes time to reek havoc and it will also give Beltran good pitches to hit with Reyes on the pitchers mind and Wright & Bay behind him.  So basically it’s my call to Jerry, take Jacobs out of the four hole right about nowish.

[polldaddy poll=2998767]

I think this would be a good move for the Mets to make.  Let’s be honest after Johan the staff is full of question marks.  I like Pelfrey, Maine and the potential of Ollie and make no mistake Guadin is non of these guys potential wise, but he is a proven mop-up guy, fifth or spot starter.  I think that Takahasi will be great in the role of second lefty and if Mejia is sent to the minors, Feliciano can be the 8th inning guy.  It also gives insurance to Jonathan Neise.  I’m sorry but I don’t want to put the ball in Pat Misch or Nelson Figeroua’s hands every fifth day.  Plus with Ollie’s track record it could only be a matter of time before one of us finally loses it and finds him after a game a put his down for good with a spiked wiffle ball bat.

Last year’s playoffs should that Gaudin is capable in pressure situations and as was proven last year and every year before that you can not have enough pitching.  that’s at least my two cents.

So we are going to do this documentary style on each player on the Amazin’s squad.  Give a little background before the season, highlights from the season and maybe a little where are they now.  But then here is the best part….. my friend James was a bartender at the Sly Fox in Queens which was located across the campus of St. Johns.  Needless to say this was a hotspot for those hard partying Mets and James has seen more than his fair share of debauchery from those guys.  Let’s just say remember when Bobby Ojeda got injured “trimming hedges?”  Well that is certainly one way to put it.  Another way to put it is that he was banging out some meat-heads chick and got thrown through the plate glass window at the Sly Fox.  Allegedly……..

So lets begin shall we…..

1986 New York Mets

World Champions

W-108 L – 54

Manager: Davey Johnson

In 1986 God smiled down on Flushing Meadows.  Okay maybe Frank Cashen made a deal with the devil, either way it was a magical year at the old Shea.  The Mets mowed through the National League East winning 108 games with a 21 1/2 game lead by seasons end.  The Mets led the league in both runs scored (783) and ERA (3.11).  The Mets big three offensively had a stellar season with the Kid Gary Carter knocking in 105 RBI’s, Kieth Hernandez chimed in with a .310 BA and 94 runs and Straw hit 27 dingers with 92 ribbies.  The pitching was outstanding with three pitchers in the top five in ERA, Bobby Ojeda, Ron Darling and Dwight Gooden.  Ojeda led the squad after coming over from Boston the year before with 18 wins and Doc, Ronnie and El Sid each hit the 15 win level.  And something you don’t see too often anymore in baseball we had a double headed monster at the closer spot with Roger McDowell ringing in 22 saves from the right side and Jesse Orosco pumping in 21 from the left.

The Mets entered the National League Championship Series against the hated Houston Astros and their ace Mike Scott.  The Mets took that series four games to two capped off by a thrilling 16 inning Game 6 that set the Amazin’s up to face the Boston Red Sox who had not won a championship since 1918.  (Quick aside: we will get into all these games in depth I just want to do a quick overview for the first article)  The Mets were able to emerge victorious four games to three after the famous Buckner play in game six and coming back from a 3-0 deficit in game seven.

1986 New York Mets were the second championship team in their then 24 year existance.  But that was not some of the things they ended up being most noted for.  For example, on one rowdy flight back to New York, United Airlines billed the team an additional $7,500 for damage resulting from food fights and other unruly antics and said the team couldn’t fly the airline again.  There was also the rampant drug use that was clearly accepted but not exactly acknowledged by players, management and the media alike.

All this and more will be broken down, focused on and rehashed as we look back at one of the greatest teams that has ever played Major League Baseball.  Next post focus: Davey Johnson.