Introduction

Chronology The following is a chronological summary of the salient events of this matter dating back to 1994, when Spencer C. Young founded the CMBS business at J.P. Morgan.  This information reveals the malicious fraud and orchestrated assassination of a previously successful career – the result of an invidious scheme devised by Warren Friend and John Westerfield of Morgan Stanley.   "The farther backward you can look, . . . . . . .the farther forward you are likely to see" - Sir Winston Churchill   (Note:  Footnotes denoted in red are explained further in the "Footnotes" section of this website, where supporting documents are accessible via hyperlink.)

1994 Through 1996

1994 Through 1996 For roughly three years prior to joining Morgan Stanley, Spencer Young realized significant successes at JPMorgan, and became the basis for which Morgan Stanley hired him,7 including: Founding JPMorgan's CMBS business8, Receiving glowing performance evaluations from his boss: "Outstanding - Far beyond expectations  . . . "Continuing Excellent Performance. All indications are that the Conduit is on the verge of great success"9; Similarly strong performance evaluations from his colleagues: "Spencer is a highly valued member of any team because he works well with others [and] is respected by those around him . . . has accomplished more in the last year than a staff of several would accomplish at many companies in the same time frame . . . has excellent product/business knowledge and stays on the cutting edge of market developments . . . is always positive and consistently looks for ways to resolve issues to improve our business . . . is highly ethical, treats everyone in the firm with equal respect and has earned the respect of clients and colleagues alike." 10 Establishing the most impressive network of strategic alliances with financial institutions, including Amresco, Banc One, First Union, Home Savings of America, John Hancock, Midlantic, Norwest and Prudential11. Building JPMorgan's conduit CMBS business from obscurity to a # 2 league table ranking among Wall Street firms in less than two years 12; Creating a cutting-edge integrated credit underwriting framework and related capital markets pricing computer model known as the "JPMorgan Black Box"13 and; Fulfilling national trade conference speaking engagements as an expert and pioneering leader in the field of Commercial Mortgage Backed Securities ("CMBS")14.

1997

1997 Morgan Stanley had a well established real estate capital markets franchise, but had failed on many occasions in their quest to establish a viable commercial mortgage conduit operation, a highly lucrative business in the CMBS industry.  In response, they hired Spencer Young to co-head initially and eventually solely head up their commercial real estate capital markets lending program (known as the "Morgan Stanley Conduit") reporting to John Westerfield, with a mandate to: (i) revamp the entire program, (ii) increase annual business production (from then current [1996] level of $500 million); and (iii) increase Morgan Stanley's league table standings in CMBS issuance. After only six weeks at Morgan Stanley, Spencer Young issued a comprehensive strategy memorandum,15 outlining sweeping business changes articulated in 49 recommendations, including creating what eventually would become the IQ® ("Institutional Quality") brand and franchise. Within nine months, the implemented changes began to take shape and annual production had more than doubled in the first year.  Mr. Young's comprehensive year end evaluation was glowing: "Has had very significant influence in the organization . . . Helped to bring management organization to the group . . .  pushed and implemented many of the key changes in the conduit, which has permitted group to increase volume to $1.3 Billion [vs. $0.5 Billion last year] . . . Has acted in a strong team player way and worked hard to make changes without being intrusive to others.16 Noteworthy excerpts from separately submitted performance evaluations17 by Mr. Young's colleagues included: John Westerfield (Managing Director - Real Estate Debt Capital Markets) in his 1997 Performance Evaluation of Mr. Young "[Spencer] has done a great job converting many leads into strong client relationships this year (Banc One, Mellon [Bank], Union Bank, General American Life, Home Savings).  These leads have hung around for a while but Spencer really was able to close on them and get them operational . . . has taken the small loan conduit to a whole new level in terms of putting long lasting relationships in place which can get us to our $2.0 Billion volume goal next year . . . moves quickly . . . is aggressive about following up and cementing deals. . . Clients like Spencer very much because he engages fully and is highly responsive to their requests.  He handles pressure calmly and is an even advocate for his clients' needs". Warren Friend (Principal - Real Estate Debt Capital Markets) in his 1997 Performance Evaluation of Mr. Young: "[Spencer] builds strong ongoing relationships . . . has a good sense of the credit [culture] and the politics of starting a new venture [with financial institutions] . . . has had positive responses from Norwest [later acquired by Wells Fargo] and John Hancock and is an extremely well organized individual who pursues business in a very methodical way.  Clients such as Home Savings of America [the largest Savings & Loan institution in the U.S. until it later merged with Washington Mutual], KeyCorp [Bank] and Union Bank [of California] have commented that his approach has helped them explain the conduit process to senior management and credit part of their success to Spencer's well [thought out] style" Jon Groesbeck (Principal - Fixed Income Sales) in his 1997 Performance Evaluation of Mr. Young: "Spencer is excellent in understanding the client's goals and objectives.  Clients call on him regularly for which helps tie up all the business - Effective closer." Russell Rahbany (Principal - Real Estate Debt Capital Markets) in his 1997 Performance Evaluation of Mr. Young: "Spencer has strong communication skills (particularly oral) which are helpful to him in originating new business.” Jonathan Frey – (Vice President – Real Estate Debt Capital Markets) in his 1997 Performance Evaluation of Mr. Young: “Spencer has excellent relationships with his clients . . . His patience in dealing with the ups and downs of the client relationships make him particularly effective . . . [his credibility with clients stems from his patience and honesty] . . . is extremely dedicated to his work and client service . . . regardless of the time of day, Spencer always returns phone calls to clients and seeks to respond to all inquiries.  For example, Spencer recently went out of his way (on a business trip to California) to visit clients of others . . . he always stresses the importance of understanding the needs of the client and tries to fill those needs.” Liz Haberkorn – (Principal – Real Estate Debt Capital Markets) in her 1997 Performance Evaluation of Mr. Young: “Spencer has good client and business development skills. . . clients find him credible and reliable . . . enjoys strong relationships with a number of key accounts . . . has been successful working with Mellon, General American Life, Key, Banc One and Washington Mortgage.” Especially noteworthy about Mr. Young’s 1997 performance evaluations, is the common theme of having established excellent client relationships with some of the largest financial institutions in the U.S. and that many of them (most noted above) were JPMorgan clients who transferred their business to Morgan Stanley in response to Mr. Young moving there – Mr. Young is one of the few people in the CMBS industry who garnered such a loyal client following by major financial institutions.  In fact, the only JPMorgan CMBS client who did not transfer its business to Morgan Stanley, upon Mr. Young’s move there was First Union, because they established an autonomous conduit operation, and distributed their resultant CMBS via a wholly-owned “Section 20” broker-dealer (First Union Securities). Spencer Young was awarded a bonus 7 ½ times his base compensation, and 40% higher than indicated expectations at the time of his hiring.

1998

1998 Spencer Young developed a cogent business plan and implemented further improvements to the Morgan Stanley Conduit, thereby driving deal volume to $2.5 Billion18 in 1998, a five-fold increase in conduit loan production in less than two years.  Moreover, this feat was accomplished despite a complete shutdown of the CMBS market in the last four months of the year due to a global fixed income market dislocation sparked by Russia’s default on its sovereign debt. Mr. Young's year end evaluation was similarly glowing: "Made numerous positive organizational changes . . . Able to use his goal orientation and management skills to really deliver and get results . . . Spencer's thoughtful planning are the reasons he is able to reach the goals set for him . . . Strong business development capability . . . Understands clients' needs and responds aggressively"19, Mr. Young was promoted to Executive Director, given expanded client responsibilities, and was asked to head up an important strategic initiative involving the development of a direct commercial mortgage lending program through the 11,000 retail brokers of the newly acquired Dean Witter brokerage firm, with over 500 offices and 4 million investment clients (the “Dean Witter Program”). The noteworthy excerpts from separately submitted performance evaluations20 from Mr. Young’s colleagues, which became the basis for his promotion included: Bill Smith, (Global Head of Morgan Stanley Real Estate Investment Banking) in his 1998 Performance Evaluation of Mr. Young: “Spencer has had a major impact on the organization and management of the [Morgan Stanley Conduit]. . .  He is well organized and a good manager. . . People like Spencer who has a pleasant personality . . . very professional and detail-oriented . . . Great team player.” Jon Groesbeck (Executive Director – Fixed Income Sales – West Region) in his 1998 Performance Evaluation of Mr. Young: “Spencer has done an incredible job bringing all the resources together to build a credible commercial conduit business . . . is effective in front of clients . . .  perceived highly for his knowledge and integrity” Jim Bowman (Executive Director – Fixed Income Sales – Midwest Region) in his 1998 Performance Evaluation of Mr. Young: “Spencer is a real pro . . . he articulates information clearly and effectively regardless of what level in the organization he is dealing with . . . an extremely valuable member of the team” Guy Metcalfe (Executive Director – Morgan Stanley Real Estate Investment Banking) in his 1998 Performance Evaluation of Mr. Young: “Spencer did a great job in working with one of my clients (Magellan REIT) to close on financings over $130 million, netting [Morgan Stanley] over $3million in fees.  The CEO and CFO of Magellan had the highest level of confidence and trust in Spencer, as a result of Spencer’s straight forward honest advice and deal term sheets, and ability to deliver on what he promised” John Westerfield (Managing Director – Real Estate Debt Capital Markets) in his 1998 Performance Evaluation of Mr. Young: “Spencer is very good at converting leads to real revenues . . . a thoughtful and creative thinker . . . highly responsive to clients . . . sets goals, keeps track of them and achieves results . . . detail oriented, professional, thorough . . . really solidifies Morgan Stanley relationships” Warren Friend (Managing Director – Real Estate Debt Capital Markets) in his 1998 Performance Evaluation of Mr. Young: “Spencer is very effective at using his vast product knowledge to win business . . . able to build and maintain solid relationships” Arvind Bajaj (Executive Director – Real Estate Debt Capital Markets) in his 1998 Performance Evaluation of Mr. Young: “Spencer is very effective in converting his client base [financial institutions] into lucrative opportunities . . . we have worked together on a variety of situations and in every case, he has shown strong judgment” Liz Haberkorn (Executive Director – Real Estate Debt Capital Markets) in her 1998 Performance Evaluation of Mr. Young: “Spencer demonstrates strong professional organization and management skills . . . he is disciplined, goal oriented and accomplishes assignments efficiently . . . he is well respected by his clients . . . manages teams well to get the deal done.” George Kok (Executive Director – Real Estate Debt Capital Markets) in his 1998 Performance Evaluation of Mr. Young: “Spencer has outstanding organization skills and provides outstanding customer service . . . produced several large portfolio transactions . . . was very instrumental in completing these transactions and without his leadership the deals might not have happened.”

1999

1999 Despite a challenging CMBS market environment carrying over from last year’s global fixed income market dislocation, the Dean Witter program headed by Spencer Young proved to be a huge success in the beta-tested offices 21 – with extrapolated projections for a roll-out to all offices indicating an additional $2.0 billion in production was plausible from this channel – strategically, it was also more profitable, because it possessed strong customer loyalty22.  Spencer Young re-branded the Dean Witter Program as "CreditSource ® Commercial". Mr. Young's year-end evaluations at Morgan Stanley continued to document him as a high performing executive: 23 Craig Phillips (Head of Global Securitized Products) in his 1999 Performance Evaluation of Mr. Young: “Spencer has continued to make an excellent contribution”. Tony Tufariello (Head of Morgan Stanley Securitized Product Group in the Americas) in his 1999 Performance Evaluation of Mr. Young: "Spencer is very well organized and pays close attention to detail.  He communicates very well with the entire group . . . Spencer has a knack for servicing his clients, but never at the expense of the firm. . . Great Guy to have on the team . . . he always gives 110%”. Bill Smith, Global Head of Morgan Stanley Real Estate Investment Banking) in his 1999 Performance Evaluation of Mr. Young: “I interfaced with Spencer when he set up the Dean Witter Branch Network origination effort for the CMBS business . . . he did a great job putting together the program which has originated more commercial mortgage business than I expected in the first year . . . most of its success is attributable to Spencer . . . Spencer has worked well with all the Dean Witter people and has been well received in the branches as he rolled out the product . . . Spencer displayed great patience in working through the problems and issues that arise in the introduction of a product that has no precedent”. Jon Groesbeck, (Executive Director – Fixed Income Sales – Western Region) in his 1999 Performance Evaluation of Mr. Young: “Spencer is in a class of his own . . . Spencer represents Morgan Stanley well and is a [magnet] for business . . . Spencer has the respect and confidence of both clients and peers and is gifted in his closing skills . . . Spencer works well with others in the firm and is a total team player”. Warren Friend (Managing Director – Real Estate Debt Capital Markets) in his 1999 Performance Evaluation of Mr. Young: “Made tremendous effort with the conduit business despite a difficult year for originating loans and issuing CMBS . . . Worked tirelessly to develop new avenues of production through strategic alliances . . . He continues his focused and successful efforts of building a cost effective origination system" For the first time, Morgan Stanley became the # 1 CMBS underwriter on Wall Street,24 and Spencer Young's bonus was increased 45%.

2000

2000 The turn of the century ushered in a “Peyton Place” environment to the areas of Investment Banking and Fixed Income at Morgan Stanley where Mr. Young worked.  Despite being faced with significant challenges, Mr. Young remained upbeat, and creatively developed new products   “A pessimist sees difficulty in every opportunity, . . . . . . . and an optimist sees opportunity in every difficulty“ – Sir Winston Churchill:    The Securitized Products Group was established as part of an organizational restructuring.   Morgan Stanley’s Real Estate Debt Capital Markets business was effectively split into two separately managed sub-groups, and Spencer Young's services were actively campaigned for by both –  John Westerfield (who co-headed the group called “Principal Transactions”), and Warren Friend (who headed up the CMBS product within the “Finance Group”, which was headed up by Gail McDonnell).   Spencer Young opted to join the Finance Group and asked to retain responsibility for CreditSource® Commercial.  John Westerfield intervened, saying: "If you move to Finance, you lose Dean Witter” (i.e., CreditSource® Commercial), and importuned Spencer to join the Principal Transactions Group, saying "I NEED you".  Mr. Westerfield made compelling promises, offering Spencer broad management autonomy with the Morgan Stanley Conduit and CreditSource® Commercial.  Based on Mr. Westerfield’s representations, Mr. Young agreed to join the Principal Transactions Group, but specifically conditioned his joining on Mr. Westerfield’s express assurances that a colleague (Russell Rahbany), noted for his brusque demeanor, a stifling micromanagement style and poor business development skills, would be precluded from replicating such transgressions with the Morgan Stanley Conduit.  Mr. Young felt it was important to articulate this condition, especially because of a rumored "unnatural" relationship between Mr. Westerfield and Mr. Rahbany, which often translated into blind support of Mr. Rahbany, who had previously failed in his attempt to establish a conduit operation for Morgan Stanley a few years prior to Spencer Young's arrival. Notwithstanding the precautions taken by Mr. Young and assurances made by Mr. Westerfield, trying to change Mr. Rahbany's management style proved to be “like trying to change the spots on a leopard”, almost immediately, Mr. Rahbany’s involvement and influence on the Morgan Stanley Conduit became untenable – and deal volume dropped off dramatically, as a result.  In response, Mr. Young called an “all-hands-on-deck” meeting for a comprehensive fact-finding session with the real estate investment bankers of Morgan Stanley’s Conduit, and issued an executive summary, which revealed the effects of Mr. Rahbany’s deleterious micromanagement, manifested in the form of stifling credit policies, off-market pricing practices and irrational customer service procedures, including feedback such as: 25 “The frustration among all bankers is quite high” “We have no confidence that we can negotiate deals because it appears we will find a reason not to do it in the 11th hour” “It appears our credit standards have increased dramatically” “We receive inconsistent messages – some tell us we can market a full line of products pursuant to the terms contained in the term sheets, and others tell us privately we don’t have an appetite [for such deals]” “The bankers have expressed concern in getting timely feedback from the desk, requiring having to duck client calls” “Our pricing in effect says we are ‘out of business’” . . . and “a sure fire way of killing the success of the CreditSource Commercial Program” Mr. Westerfield made no attempt to mitigate the situation, choosing instead to call into question the veracity of Mr. Young’s findings.  Furthermore, Mr. Young recommended 11 comprehensive changes in business strategy to boost business – however, all were rejected by Rahbany.  Mr. Young circulated a matrix summary of the vetoed fate of each recommendation26 to Mr. Westerfield, who again was unresponsive.    Despite frequent requests over many months by both George Kok (Chief Credit Officer of the Morgan Stanley Conduit) and Spencer Young (Chief Operating Officer of the Morgan Stanley Conduit) to “do something about Russ”, Mr. Westerfield continued in his bizarre and unflinching support of Mr. Rahbany’s draconian and nocent decisions.  As Mr. Young surmised this situation would only get worse, in February 2000 he began holding discussions with Gail McDonnell and Warren Friend to orchestrate his transfer to the Finance Group.    Months later, after Ms. McDonnell had done some behind-the-scenes planning for Mr. Young’s arrival, she gave him the “go-ahead” to arrange a meeting with Craig Phillips to personally request his transfer to the Finance Group of Securitized Products27 , which indeed occurred.  The “Terms of Transfer” agreed upon by the respective parties, were as follows: Spencer Young would retain responsibility for the highly promising and strategically important CreditSource® Commercial Program; An Oversight Committee comprised of Senior Executives in the Principal Transactions Group and the Finance Group would be established to perform an ongoing review of the credit, pricing, and customer service practices pertaining to CreditSource® Commercial deals; and Mr. Rahbany would be excluded from input to Spencer Young’s year-end evaluation. After the transfer was completed, Jon Groesbeck warned of Mr. Westerfield’s notorious vindictive nature and Gail McDonnell’s demonstrative weakness in dealing with aggressive “type-A” personalities such as Mr. Westerfield, but agreed with Mr. Young’s decision under the circumstances.  George Kok assumed Mr. Young’s role, however, he resigned a few months later for the same reasons cited by Mr. Young.  Although Spencer Young was allowed to retain responsibility for the Dean Witter (CreditSource® Commercial) Program, Messrs. Westerfield and Rahbany colluded to effectively “drive it into the ground”, employing the same antediluvian logic as a spurned lover killing their former mate with the mindset of  “if I can’t have him/her, nobody will”. Accordingly, the planned Oversight Committee never materialized (Messrs. Westerfield and Rahbany blocked its establishment), and suddenly, not a single deal from well over a billion dollars of potential transactions submitted by Dean Witter financial advisors was approved by the “Credit Approval Committee”, (chaired by Mr. Rahbany) – and it was not a coincidence that this phenomena began shortly after Mr. Young requested his transfer. On the day Mr. Kok said his good-byes to join rival firm, Merrill Lynch, he confided in Mr. Young that Messrs. Westerfield and Rahbany had instructed him to fabricate reasons to reject all CreditSource® Commercial deals that came in through the Dean Witter retail brokers.  Moreover, as an additional breach to the Terms of Transfer, and at Mr. Westerfield’s express insistence, Russ Rahbany was re-inserted as Spencer’s year-end performance evaluator, so that he could concoct a negative evaluation, indicating Mr. Young was suddenly now “not a team player” – a change in assessment more sudden and dichotomous than Dr. Jekyll’s transmogrification into Mr. Hyde.  Such an indictment was absurd based on his evaluations over the last three years at Morgan Stanley and his time at JPMorgan – it is also the anti-thesis of Mr. Young’s very Psyche – for instance, in the years that he served as Basketball Commissioner for his town and parish,28  and as the head basketball coach of many youth league teams, Mr. Young had a reputation for espousing the magical benefits of teamwork, frequently appearing in the local newspaper articles in this regard.29  Moreover, Mr. Young had a deep experience base in playing highly competitive team sports – for instance he played Division I football, starting as a sophomore for Cornell University under legendary NFL head coach, George Seifert, playing a position he was not recruited for because it was in the best interests of “the team” – by comparison. Messrs. Westerfield and Rahbany possessed no such experience base. Moreover, Mr. Westerfield submitted a similarly prevaricated negative evaluation, starkly contradicting by his gushing positive assessments of Mr. Young in the years prior.  Adding to the intrigue, Mr. Young learned there were more than 10 “missing evaluations” on the Dean Witter side of the business, from people who were effusively supportive of Mr. Young.  This prompted a response by Spencer Young to set the record straight30: “I have not responded in past evaluations, as I felt for the most part that they have been accurate.  This year is not the case.  I believe this year’s assessment has an imbalanced negative bias for the following reasons: (1) 10 or more upward/peer evaluations were not included in the assessment; (2) my strong objection to working for Russ Rahbany that necessitated my request to leave the Principal group; and (3) certain of the evaluations that were received appear to reflect a visceral response to my request to leave the Principal group.” I concluded my memorandum with: “I look forward to the opportunity to dispel this erroneous, and I believe vindictive comment about teamwork.” As it became obvious Mr. Rahbany's caustic management style was problematic, Russ Rahbany was compelled to transfer to the United Kingdom, or otherwise leave Morgan Stanley – Westerfield was livid about this consequence, and told many that he would eventually "exact revenge" against Spencer Young. Notwithstanding the aforesaid dysfunctional activities, Morgan Stanley retained its # 1 position as underwriter and issuer of CMBS for the second year in a row.

2001

2001 Spencer Young headed up an initiative to create what would become the IQ® brand franchise, 31 consistent with what he envisioned in his April 1997 business strategy memorandum.   He undertook this leadership role with fervor and focus, such that when discussing what to call the resultant new product and CMBS brand, the very team working on it with him, kiddingly suggested it be called SPENCER® (representing "Special Purpose Entity No Credit Enhancement Required"), and create a shelf registration with the Securities & Exchange Commission under the same name, so that it could be marketed as "Spencer For Hire”. In advance of the impending launch of the first IQ® deal, Tony Tufariello (Head of the Securitized Products Group in the Americas) announced in an internally televised SPG meeting, that this exciting and very promising new product initiative that was being led by Spencer Young. The inaugural IQ® deal came to market in mid-October, comprised of portfolio mortgage loans from five new clients Aegon, Allmerica, Lincoln, Nationwide and MONY (all brought in by Mr. Young) and TIAA, and it was a landmark deal 32 for many reasons: It reopened and immediately stabilized the CMBS market, which was shut down after the 9/11 attacks) It launched a wholly-owned proprietary brand of high quality collateral CMBS; It possessed a servicing standard that vested control over client service with the respective contributing insurance company servicing groups; It was the first time six unaffiliated deal sellers participated in a CMBS deal; Five of the six deal sellers were first time issuers in the CMBS market; It was the first time below investment grade bonds were sold on seasoned commercial mortgage loans from insurance company portfolios; It carried strategic importance to the insurance company clients in that it demonstrated portfolio liquidity, reduced real estate exposure, reduced risk-based capital requirements, created large arbitrage gains, and launched capital markets lending initiatives for many client insurance companies. It set the stage for frequent repeat business and lured other financial institutions to participate in future deals, As a testament to the high quality of its underlying collateral, this deal received the best capital structure of any multi-seller transaction; and It established a platform by which Morgan Stanley could include its own collateral to capture large arbitrage gains. The success of the first IQ® (“Institutional Quality”) transaction was astounding, as it was submitted by Morgan Stanley to Institutional Investor Magazine for consideration as “Deal of the Year”.  Moreover, it was shortly after its completion that Mr. Young began to notice a dramatic change in Warren Friend’s behavior.  For instance, Mr. Friend went “on the air” (i.e., an internal TV broadcast in Morgan Stanley offices throughout the world) announcing the success of the landmark IQ® deal, and the enormous value it represented to the Morgan Stanley Franchise.  Representatives from other areas of Morgan Stanley made similar announcements on other noteworthy transactions – however, there was a starkly dichotomous contrast between Mr. Friend’s remarks vis-à-vis those of others who waxed eloquent about the individuals responsible for each transaction – Warren Friend spoke in a haughty self-aggrandizing manner, taking full credit for the IQ® deal, making no mention of Mr. Young,33 who sat in the audience at Morgan Stanley’s New York headquarters aghast at Mr. Friend’s audacious self-serving prevarication.  The performance evaluation process for 2001 was cancelled because of the 9/11 attacks, but Gail McDonnell informed Mr. Young his performance was “outstanding”, citing three reasons: (1) he launched the IQ® (“Institutional Quality”) brand; (2) he brought in five new major financial institution clients; and (3) he was embraced by many on the trading floor.  John Westerfield even sent an uncharacteristically complimentary email to Mr. Young as follows: “I saw Gail yesterday, and she said you were doing well with your client base.  Good job!” 34 Morgan Stanley became the # 1 underwriter and issuer of CMBS on Wall Street for the third year in a row.  Despite being a significant down year on Wall Street (from the 9/11 attacks), Spencer Young’s compensation was further increased.

2002

2002 Spencer Young brought two more highly profitable IQ® deals to market, leveraging his relationships with Univest, (who carried out the underwriting work for each client), Thacher Proffitt & Wood (who did much of the legal work for each client), and Nationwide (who developed the customer service loan servicing standard), and wrapped up his trademarking work35, thereby finalizing the brand. Mr. Young also completed the largest agribusiness portfolio disposition ever (which also generated the largest single transaction fee in the Securitized Products Group that year); and with these three transactions landed three important new clients – State Farm, AXA and Union Central Life.  Mr. Young was often complimented for a job well done by clients and senior Morgan Stanley management, but noticed the more he was complimented, the more strange Mr. Friend’s behavior became (e.g., Mr. Friend tried to block Mr. Young’s participation in important meetings for entirely irrational, contrived and spurious reasons, such as the critically important rating agency meetings for the IQ®2 deal).36   Earlier in the year Warren Friend specifically promised Mr. Young he would receive an "outsized bonus" and "promotion" if he could close the AXA deal, complete two more IQ® deals (IQ®2 & IQ®3) and finalize the trademarking of the IQ® brand.   The revenue generated by these “platforms” also met the parameter to promotion “to the next level”, as articulated by many in the organization, including Mr. Westerfield (years ago) and Gail McDonnell (months ago).  Mr. Young delivered on all of the expressed conditions, and was separately asked to additionally head up the marketing of all securitized products (e.g., auto loans, credit cards, HELOCs) to middle market financial institutions, with a targeted launch in January of 2003. However, to the shock and dismay of many clients, as well as many within Morgan Stanley, Spencer Young was fired without cause on November 20, 2002, and escorted out the door within minutes of his notification.   Warren Friend and John Westerfield, Managing Directors at Morgan Stanley, orchestrated Mr. Young’s inclusion in a firm-wide downsizing, using a technique known as "mobbing"37, consistent with Mr. Westerfield’s earlier threats.38 Not only did Morgan Stanley renege on its express promises of "an outsized bonus" and "promotion", Mr. Young was paid no bonus at all. Many of the Analysts and Associates who worked throughout the trading floor in rotational shifts across different businesses were especially dismayed and saddened over this action – for in their evaluations of Spencer submitted just a month earlier were effusively supportive of Spencer Young.   (Note: Morgan Stanley policy calls for keeping the identity of upward evaluations “anonymous”, as noted in the corroborative personal evaluations).39 A representative sample of such assessments ensues: “[Spencer] by far makes the most effort to include and communicate with all members of the team.  Also, Spencer always makes a great effort to explain concepts to Analysts, when questions arise, graciously making time and efforts to clarify all issues as necessary.” “One of Spencer’s greatest strengths is his willingness to connect with all members of the team, including junior members.” “Spencer is one of the nicest guys on the [trading] floor.  He treats everyone with respect and is very considerate.” “Spencer is always willing to spend time with interview candidates and junior people.  For example, this summer I managed the summer analyst rotation program for the [Securitized Products Group].  Spencer was ALWAYS willing to make the time for the candidates.  He filled out thoughtful reviews of the summer interns and contributed significantly to the program.” “Spencer did an excellent job with the AXA transaction in getting and keeping the rest of the team involved . . . As a junior member of the team it means a lot that he took the time to make sure that I was involved and not left out of any part of the process” And the disillusionment over Mr. Young’s abrupt termination was not just limited to the Analysts and Associates – the following are excerpts of evaluations from Senior Managers at Morgan Stanley40: John Marzonie (Executive Director – Fixed Income Sales – Midwest Region) in his 2002 Performance Evaluation of Mr. Young: – “By far, Spencer is one of the best at Morgan Stanley to communicate with the team at all levels.  This is a valuable skill, especially in our fractured world”.  Sanjeev Khanna (Executive Director – Securitized Products – Finance Group) in his 2002 Performance Evaluation of Mr. Young:   “Spencer is excellent at sourcing client opportunities and building consensus team goals to meet the client’s objectives and maximizing the return to Morgan Stanley. . . Spencer is excellent at developing trust with clients . . . We were able to complete the innovative AXA agricultural portfolio monetization because Spencer stuck with the opportunity . . . he continuously pushed the client through each phase of the execution” Jon Strain (Managing Director & Head of Morgan Stanley’s Securitized Products Trading Desk) in his 2002 Performance Evaluation of Mr. Young: “Spencer has very high expectations of himself and of Morgan Stanley – he is very professional in his approach and is a detail-oriented person . . . Spencer has the best call report [communication] skills I have ever read . . . he is very diligent about communicating ” Despite this backdrop, Morgan Stanley rebuffed all good faith attempts by Spencer Young to negotiate a fair severance.  Mr. Young expressed in an e-mail dated December 1, 2002 to Craig Philips, Head of Morgan Stanley's Securitized Products Group: “I'm hoping we can find a way to accomplish an honorable discharge that is fair to all.  For me, I looking to be fairly compensated for the unfulfilled promises that were made in the context of the value delivered.”41

2003

2003 January – February 2003:  Spencer Young had multiple rounds of interviews with Goldman Sachs, during which he gave detailed business plan presentations to various senior managers, and in each instance his message is enthusiastically received.42   Spencer was told behind the scenes that a definitive offer of employment was pending, and would be finalized after a senior executive level presentation, to be followed by dinner with the Goldman Sachs CMBS team.  Spencer was so assured of the imminent Goldman Sachs offer, he formulated a career plan around this apparent eventuality.  However, quite suddenly, all employment discussions ceased with Dan Sparks, the Group Head, with whom Mr. Young had extensive previous dialogue. It was later discerned Morgan Stanley surreptitiously intercepted the planned offer via defamatory prevarications placed at a very senior level, discrediting his achievements as "hyperbole".  According to Jeff Fastov, Managing Director at Goldman, a call came in at a high level from Morgan Stanley providing an “entirely different perspective” on Spencer Young, and called into question every one of his stated achievements.   January - March 2003:  Brian Baker, Managing Director and co-head of the JPMorgan Chase CMBS Group, contacted Spencer Young in the context of rejoining JPMorgan Chase (now a merged company with Chase Manhattan). 43 Mr. Young was asked to draft a letter (on behalf of Brian Baker and Steve Schwartz, the other CMBS Group Co-Head) to senior management at JPMorgan Chase, recommending that Mr. Young be hired, because they wanted to move quickly on it, as they were aware that an offer was imminent from Goldman Sachs.    Mr. Young was told he would come on as a Managing Director, focusing on new business development (for which Mr. Young was renowned) and to create a proprietary CMBS product similar to what he had done at Morgan Stanley with the IQ® Brand.   Mr. Young’s meeting with John Steinhardt, The Group Head of Fixed Income at  JPMorgan Chase went especially well – resulting in a very strong rapport and interpersonal “chemistry”.  Mr. Steinhardt sent an email to Mr. Young saying: “I found your product ideas and market views very interesting, and I have no doubt you will be additive to our platform”.  After many extensive rounds of interviews and business plan presentations, Mr. Young received an offer of employment, the details of which he was told would be worked out when Mr. Young returned from a previously planned one-week family vacation. In the interim, Morgan Stanley intervened to void Spencer Young's offer from JPMorgan Chase in a manner similar to Goldman Sachs (i.e., communications at a very senior level); however, in this instance, the offer was actually rendered.  Brian Baker later confided with Mr. Young that he and Steve Schwartz were given directions from “the powers that be” to keep changing the offered terms of employment to become less and less favorable, so that Mr. Young would eventually sour on the deal.  For instance, the originally offered Managing Director position within the broker-dealer of JPMorgan Chase was modified to a demoted level of Vice President at a non-broker-dealer subsidiary that would invalidate Mr. Young's many securities licenses.  [By way of background, Mr. Baker was originally hired by Spencer Young when he was the Chief Operating Officer of JP Morgan's commercial mortgage conduit.] In an e-mail dated March 13, 2003, Mr. Young called their bluff by stating “I will accept what you say is the best you can do”, so JPMorgan Chase was faced with the uncomfortable task of having to revoke their offer of employment without a legitimate basis for doing so.  Mr. Young sent a memo to the JPMorgan Group Heads of Fixed Income (John Steinhardt) and Structured Finance (Michael Malta), who previously expressed their enthusiastic support of Mr. Young coming on board, and inquired about the mysterious “about-face”, but he received no response, and his phone calls went unreturned.   March - June 2003: Morgan Stanley stepped up its efforts to intervene and intercept Spencer Young’s job opportunities at Lehman Brothers, Deutsche Bank, Eurohypo, ABN-AMRO, Nomura Securities, Merrill Lynch, UBS and Hyperion, as promising initial interviews were followed by a mysterious cessation of communication, manifested in having Mr. Young's phone calls suddenly go unreturned.   Eventually, other firms (e.g., CS First Boston, Commerz Bank, CIBC, Greenwich Capital, Salomon Smith Barney, Fortress)  just didn’t bother returning Mr. Young's calls, as Warren Friend and John Westerfield were actively "broadcasting" that Mr. Young had nothing to do with Morgan Stanley's successes, and they besmirched his personal integrity by saying that he merely took credit for the work of others, thereby dismissing Mr. Young’s achievements as "hyperbole"— a word Mr. Young keeps hearing from many sources.  In an attempt to countermand the vicious slander being propagated by Morgan Stanley, Mr. Young compiled and disseminated compelling lists of his competencies, accomplishments, client references and landmark transactions. 44 Mr. Young later learned that Morgan Stanley also utilized “economic blackmail” by threatening to “yank” certain unrelated business or otherwise exerting its prodigious influence so that it would have dire economic consequences to any firm that decided to hire Mr. Young.   July 2003:  Morgan Stanley continued to rebuff all overtures by Mr. Young to mediate the matter or otherwise enter into good faith negotiations for a fair and reasonable settlement, and their prolific efforts had effectively “poisoned” Spencer Young’s highly accomplished professional career in the CMBS industry and grotesquely redefined his reputation, such that he became a “persona non grata” with all Wall Street firms.  In a letter to Messrs. Vikram Pandit and Stephan Newhouse (Co-Heads of Institutional Securities at Morgan Stanley), Alan Sklover wrote on behalf of Mr. Young as follows:  “Before our firm was retained by Mr. Young, he sought to resolve these issues with Morgan Stanley without the involvement of legal counsel. On or about December 1, 2002, Mr. Young wrote to Craig Phillips, Global Head of Securitized Products, in a good faith effort to raise and resolve these matters. However, Morgan Stanley, through Craig Phillips, rejected Mr. Young’s efforts to resolve this matter. This response – which failed in every measure to respond to Mr. Young’s concerns, and failed in every measure of Morgan Stanley’s corporate core values of integrity, respect, responsibility and fairness – was unfortunate, indeed. As a result, Morgan Stanley has left Mr. Young with no alternative but to pursue his claims through arbitration. Mr. Young’s National Association of Securities Dealers (“NASD”) Statement of Claim has now been drafted. . . it is the practice of our firm to transmit a copy of the draft NASD Statement of Claim to respondent to determine, in good faith, whether arbitration can be avoided by affording the putative respondent one final opportunity to submit an offer of settlement.” 45 Nevertheless, Morgan Stanley did not to respond, so Sklover & Associates filed a Statement of Claim for $9.98 million on behalf of Spencer Young with the NASD.   August - November 2003:  Morgan Stanley filed their “Answer” 46 to Spencer Young’s Statement of Claim with the NASD on August 28, 2003, fraught with an astounding level of sophistry – containing 97 prevarications, equivocations and boldface lies.  In so doing, Morgan Stanley has committed a perjury of epic proportion, propagated by ongoing tortious manifestations in the CMBS industry – in total, Morgan Stanley's Answer contained 97  “statements of fact” that were patently FALSE, which were not only readily proven so – many were contradicted by the very people at Morgan Stanley who made such claims. Undaunted, Spencer Young formulated "Project Atlas" and recruited an impressive team of senior executives ("Principals"), many of whom were real estate- and capital markets-related group heads at insurance companies instrumental to the establishment of the IQ® brand.  Client representation in Project Atlas included: Aegon * Allmerica * AXA / Equitable Cigna * GMAC John Hancock * MONY * Nationwide * Standard Insurance State Farm * Travelers Union Central Life * _________________________ * IQ® transaction participant   In November 1993, Spencer Young engaged Jeff Liddle as lead counsel, noted for his litigation skills in NASD Arbitration hearings, retaining Al Sklover, as Advisory Counsel, and Contract Negotiations Counsel for Project Atlas.

2004 to Today

2004 to Today  January – March 2004:   Spencer Young held extensive discussions with foreign financial institutions, including HSBC, BNP Paribas, and Barclays. 47 His discussions with Barclays were initiated many months earlier with the CEO of Barclay's Capital, Tom Kalaris, (for whom Mr. Young had worked at JPMorgan), when Mr. Kalaris was head of Fixed Income and Mr. Young launched the CMBS business at JPMorgan, and was the Chief Operating Officer of its Conduit.   Extensive meetings and interviews were held at Barclays, and indications were that Spencer was going to be hired in one of two capacities – either as Group Head of CMBS or the next in line, and in either case, Project Atlas would be launched in some form.48 Consistent with prior mysterious revocations of offers and sudden cessation of expressions of keen interest, the same thing happened at Barclays. Mike Mazzei, a neighbor who lives a few blocks from Mr. Young, was selected to run Barclay Capital’s CMBS business.  Notwithstanding, Mr. Mazzei invited Mr. Young to a New York Knicks Basketball game, and indicated his intent to hire Mr. Young to employ features of Project Atlas.  Nevertheless, Mr. Mazzei was later instructed not to do so.  Confidentially, Mr. Mazzei informed Mr. Young that Morgan Stanley was doing and saying things that made employing Mr. Young “too controversial”. April - June 2004:  Although thwarted again by the "tortious tentacles" of Morgan Stanley, Spencer Young turned his attention to launching Project Atlas through a less conventional channel, and one which he believed Morgan Stanley would have less chance of intercepting.  “Success consists of going from failure to failure without loss of enthusiasm.”  – Sir Winston Churchill Mr. Young held extensive discussions, interviews, and presented detailed business plan discussions with senior managers of Allied Capital, a publicly traded company which invests in subordinate CMBS, and specializes in launching a wide range of new business initiatives.  In fact, Allied Capital had invested in one of Spencer's IQ® deals.  They were pleased with the investment and wished to establish the captive origination capability that Project Atlas offered.  An offer was made to Spencer, with a mandate to launch certain aspects of Project Atlas by July.  Detailed budgets and comprehensive time-lined implementation plans were developed, 49 Alan Sklover began drafting the employment contracts at the terms offered, and Project Atlas Principals on the originations side began setting into motion their respective business plans.  In my May 23, 2004 email to Liddle & Robinson, I advised you as follows: “I have had extensive discussions with Allied Capital, which is the largest business development company in the U.S., and one of the largest investors in CMBS, to join as a Managing Director, heading up originations and capital markets components of Project Atlas and assimilate this in a phased manner with the investment side of Atlas, which already exists at Allied – in short an ideal platform” “The next steps are to review the plans in further detail at their headquarters in Washington, DC next week, finalize my employment contract terms and meet with the CEO and COO, which they indicated would be “more ceremonial” than anything else.” “I worked with Al Sklover on the employment contract – he was very helpful in that he cleared his calendar for me on short notice and worked with me on it over [last weekend].” The Atlas Principals are “battle-station ready”.  Then quite abruptly, Allied Capital ceased communication.  Despite subjecting themselves to significant career risk by divulging their identity, each of the six core business segment Atlas Principals placed calls into John Scheurer, Head of Allied's Real Estate and CMBS business segments, leaving detailed voicemail messages, indicating they were Principals of Project Atlas, and were fully committed to this initiative – however, Mr. Scheurer never returned their calls.  One of the Project Atlas Principals (Steve Cole) wrote in a June 8, 2004 email: “Radio silence from John Scheurer. This is starting to feel a lot like the Barclays experience from a few months ago.”  50 To quote Yogi Berra, it was "deja vu all over again" – this time it was confirmed with Dave Iannarone of Allied Capital that Morgan Stanley intervened and presented a “situation” that made Mr. Young's hiring “too risky an undertaking for a publicly traded company” – despite my additional prodding, he was not willing to provide further details.      Thoroughly exasperated by what Morgan Stanley was doing, Mr. Young sent an email on June 21 to Tom Kalaris, 51 the CEO of Barclay’s Capital, (for whom Mr. Young worked at J.P. Morgan) and wrote: “I have valued your counsel and assistance throughout the many months that Barclays was considering my employment and related business proposals – but I need it now more than ever, as this situation is now taking a heavy toll on my family.”  Mr. Kalaris responded by suggesting that Mr. Young call him at his home that night.  In this phone conversation, Mr. Kalaris confirmed Morgan Stanley has been doing things to ensure Mr. Young does not work on Wall Street again, or if he does, it will be so far down the road, or in a manner that will otherwise be benign to their interests.  Mr. Kalaris said he was imparting this information “as a friend”, but declined to go into further detail – he suggested Mr. Young pursue alternative employment plans outside Wall Street, at least until his NASD Arbitration Claim is heard. While I appreciated this information and guidance, I was struck most by his lack of valor, as has often been the case in this matter, exemplified in his reticence to do anything substantive to help correct this egregious wrong. “Once in a while you will stumble upon the truth, But most of us manage to pick ourselves up And hurry along as if nothing had happened.”  – Sir Winston Churchill   July 2004 – Today:    Spencer Young reluctantly accepted the realization that Morgan Stanley would continue to brazenly thwart his re-emergence in the CMBS industry.  As a result, Mr. Young had to relocate away from his family.  But to ensure Mr. Young does not pursue his mounting civil claims and expose the widespread instances of Fraud, Racketeering, Extortion, Sabotage, Corruption and Antitrust, Morgan Stanley and Kirkland & Ellis followed him (through corrupt influence and operatives) to North Carolina to perpetuate this nightmare, the details of which are contained in the www.CABLEINCH.com website. Mr. Young remains undeterred in his quest for justice -- Magna Est Veritas Et Praevalebit in MorganStanleyGate.   “ Solitary trees, if they grow at all, grow strong. “ – Sir Winston Churchill