SUPREME COURT OF THE STATE OF NEW YORK

¡
COUNY OF NEW YORK
-------------- ...----------.--------..---------------------------------l(
GENTRY T. BEACH and ROBERT A. VOLLERO,
hidel( No. 603611/08
Plaíntiffs,
IAS Par 56
- agaínst - (Lowe, J.)
TOURJI CAPITAL MAAGEMENT, LP and
PAUL TOURJI,

Defendants.
-..------------------.....-------..-----------------------------.....ool(
TOURJI CAPITAL MAAGEMENT, LP and
PAUL TOURJI,

Counterclai Plaítiffs,

- againt.

GENTRY T. BEACH and ROBERT A. VOLLERO,

Counterclaim Defendants.
------------------_......-----------------------_...-------------------l(
TOURJI CAPITAL MAAGEMENT, LP,
DEEPROCK VENTU PARTNRS, LP and
PAUL TOURJI,

Counterclaim Plaítifs,

- aganst -

VOLLERO BEACH CAPITAL PARTNRS LLC,

VOLLERO BEACH CAPITAL FU, LP,
VOLLERO BEACH ASSOCIATES LLC,
VOLLERO BEACH CAPITAL OFFSHORE, LTD.,
AN GARY BEACH

Counterclai. Defendants.
-----------------------------------...-------------------------ow_ow_owl(

THE TOURAJI DEFENDANS' COUNTERCLAIMS

AN ANSWER TO FIRST AMNDED COMPLAI
 TABLE OF CONTENTS
.1

NATU OF TH CASE ............................................................................................................. 1

I
ALLEGATIONS COMMON TO ALL CLAIS ................................................................ 5

A. Beach And Vollero Join Tourdji Capital As At-Wil Employees Aftr

Their Maí hivestor Pulls Out Of Their Prior Employer's Fund......................... 5

B. Beach And Vollero Are Paíd Millons Of Dollars For 2005.................................. 8

C. Beach And Vollero Faíl To Deliver Capita As Represented............................. 8

D. Beach And Vollero Cause The Small-Cap Debacle hi 2006.............................10

E. Beach and Vollero Are Well Compensated For 2006 Despite Their Poor
Performance .......................................... ........................................................... 11

F. Beach And Vollero's Lackluster 2007 Performance ........................................ 12

G. Beach And V ollero Constrct And Superise An Abysmal Private Equity Effort
.....................................................................................~...................................... 12

H. Playa Oil & Gas: Beach Creates And Takes Advantage Of A Confict
Ofhiterest To Benefit His Father, And The Two Men Abscond With
hivestor Capita ................... ......... ........... ................................. ......... .................. 13

I. Beach Is Demoted Back To Anyst................................................................ 18

J. Beach's Failur In Private Equity Come To Light............................................. 20

K. Beach Apologies For His Repeated Faílures And Misconduct....................... 21

1. Beach's Demotion Is CommU!cated To Invesors .......................................... 22

M. Beach And His Father Implement Their Conspiracy To Abscond With

Capita From Playa ......................................................................................... 23
N. Beach And Vollero hivent Clais Of Constrctive Dischage.......................... 24
O. Beach and His Father Abscond With hivestor Capita ....................................... 26
P. V ollero Remaís At Touradji Capita hi An Attempt To Manufactue
A Lawsuit................ ................................................. ............ ........................... 27

Q. Beach And Vollero Raise Capita For The Vollero Beach Parership
By Misrepresenting Their Track Record And Roles ......................................... 29

i
 R. Beach And Vollero Manufactue Clais Of Improper Tradig By
Touradji Capita ................................................................................................. 31

COUNERCLAIMS..................................................................................................................34

ANSWER..................................................................................................................................44

AFFIRATIVE DEFENSES .................................... .............................................................. 51

PRAYE FOR RELIEF ..........................................................................................................52

ii
 Defendant and Counterclai PlaíntiffTouradji Capital Management, LP and

.j
Counterclaím Plaintif DeepRock Venture Parners, LP (collectively "Touradji Capital") and

Defendant and Counterclaím Plaíntiff Paul Touradji ("Touradji"), for their counterclais agaíst

Plaíntiffs and Counterclai Defendants Gentr T. Beach ("Beach"), and Robert A. Vollero

("V ollero") and agaínst Counterclai Defendants V ollero Beach Capital Parers LLC, V ollero

Beach Capital Fund, LP, Vollero Beah Associates LLC, Vollero Beach Capital Offshore, Ltd.

(collectively, the "Vollero Beach Funds"), and Gar Beach, and for their answer to Plaíntiffs'

First Amended Complaint, respectflly allege and aver as follows:

NATURE OF THE CASE

1. While they were employed at Touradji Capita, Gentr Beach and Robert Vollero

were responsible for the destrction of milions of dollars of invesr capita thugh a pattm of

fraud, breaches of fiduciar dut, mismanagement and uttr disregard for the interests of the

investors whose capital they were obligated to protect.

2. In addition, Gentr Beach and his father, Gar Beach, together stole investor

capita from one ofTouradji Capital's private equity investents, Playa Oil & Gas, LP

("Playa"). Touradji Capital's investigation has revealed that Gentr Beach's father, Gar Beach,

wired $500,000 of investor fuds from Playa to himself, and then secretly shaed that money

with Gentry Beach. Contemporaneously with these events, on September 26, 2008, Gentry

Beach claied that he was "forced to resign" from Tourdji Capital- even fiing a false police

report in which he claied he had been theatened -- when in fact he had already set up a

competing business well before that tie.

3. Afer these events occured, thoughout the fall of 2008, V oHero remaíed at

Touradji Capital deviously and unethically gathering confidential information about the firm and

creating a fraudulent record concerning his compensation -- all the while falsely representing that
 he had ended his association with Beach. hi fact, the evidence now shows, Beach and Vollero

had ben planng to form a competing hedge fud -- called the "Vollero Beach Funds" - well

prior to their supposedly forced depares frm the firm. hideed, one of their new employees

was alreay calling Gentr Beach his "boss" while Beach was stil employed by Touradji

Capital.

4. Not content to have inicted ths har on Touradji Capital and its investors,

Beach and V ollero - who were paid milions of dollars while at Touradji Capita - have now

fied a complaint in which they demand over $50 milion dollars in additional compensation.

They base ths clai upon a supposed agreement entitling them to, among other thgs, a

majority oftke profits to be eared by Touradji Capita based upon its energy equity portfolios--

an agrement that by their own admission was never setforth in a written contract, and never

corresponded to their actual compensation.

5. The reason tht ths alleged guanteed "bonus" component of Beach and

V ollero's employment agreement was never set forth in a wrtten agreement - and was never

referred to in a single email sent by these men in the three years that they worked at Touradji

Capital- is that it never el(isted. Beach and VoIlero's claím for milions of dollar in additional

bonus compensation is therefore a paricularly brazen el(ample of the sort of stomach-tug

greed and entitlement that has made headlines for the past year.

6. Beach and Vo!lero's clai for additional compensation is based upon the false

premise that they were hired as, and acted as, portfolio mangers throughout their employment at

Tourdji Capita, and that they alone were responsible for successfully managing Touradji

Capita's equity trading books. It is also based upon the false premise they had nothng to do

with the poor performance ofTouradji Capital's private equity investments.

2
 7. hi fact, afer Beach and Vollero were given responsibilty for portolio

management, it became clear that Beach, in parcular, was fudamentally incapable of managing

a trading portolio -- as even his co-plaítiff and closest frend, Rober V ollero, admtted on many

occasions. As VoIlero put it, Beach merely "star(ed) at tickers," acted "rashly" and in a way that

was inconsistent with weIl researched conclusions, and did not even understad "how the

portolio was actually strctued." As a reslÙt, even Vollero ultimately agreed tht Beach should

be demoted and should fuction as nothing more than an analyst.

8. V oIlero also secrety confded to Beach that both of them 'Just look at ticker and

go with them when we need something to buy and when we need something to seIl." To others,

however, V ollero misrepresented himself as a carefu and meased portolio manager.

9. Put simply, the idea that Beach and VoIlero - who raísed virtally no capital and

who did not even possess the e¡¡erience or skills that they had represented to Tourdji at the

time they were hired -- would themselves be entitled to a majority of the profits to be eared by

Tourdji Capital from its Funds' equity portolios, is preposterous.

10. Beach's arogant refusal to follow even the simplest directions, and rus disregard

for the interests of T ouradji Capita's investors, is even more evident in connection with his

oversight ofTouradji Capita's private equity investments.

1 i. Notably, Beach and V ollero now seek to misrepresent their roles in ths area, and

their complaínt makes no mention of their private equity activities. That is because that effort

was an obvious failure and could never be squaed with a demand for $50 million in additional

compensation. As V ollero put it in a 2008 e-mail:

3
 (G) entr spent a few years running our private equity practice
and, to be honest, this was not something for which he was well
suited. Our PE effort has been disappointig and chaotic and it
ha shown in the results, e.g. (Madagasca Oil, which resulted in a
hundred milion dollar write-down).

12. Beach's fudamentaly dishonest natue - and the lengths to which he will go to

generate a false record in support of his claíms - is fuher revealed by his allegation that

T ourdji thratened to "ruin (Beach's) marage and famly" even if it meant "saying thngs that

are untre." Ths false allegation was made by Beach out of a fear that his betrayals of his wife

and family - about which he had boaste withn Touradji Capital- would surace in the course

of this dispute. The trth is, Beach has for years caried on an ilicit afaír with a young

Argentinean student, a relationship which included his makg secret wire transfers to support

her financially. Beach had thus long ago "ruined" his own marage, yet now has cyncally

tued that conduct into a false allegation about Touradji.

13. Nor were Beach and V ollero's lies and misconduct limited to their business

deaings while at Touradji Capita. For el(ample, they plainy misrepresented their own roles

while at their prior employer, Solstice, and Beach agreed to lie for his Argentinean mistrss in

connection with her visa documentation. Furhermore, Beach and V ollero are now

misrepresenting their roles at Touradji Capital and their trading strategy in the marketig of the

V ollero Beach Fuds. Gentr Beach and his father have also repeatedly lied under oath in a

separte litigation between Gar Beach and Touradji Capita in Tel(as. Beach and Vollero alo

falsely disparged Touradji and Touradji Capital in the press, in the marketplace, and in their

commuications with potential investors in the V ollero Beach Funds.

14. As Beach once secretly confded to Vollero, "We can overcome our weakesses

together." This statement also aptly describes ths very lawsuit: A collusive effort by two young

men to fabricate a claim for compensation when the evidence defeats such a claim absolutely.

4
 15. Tourdji Capita fies the present counterclaíms and cross-claims to recover from

Beach, Vollero, the Vollero Beach Funds, and Gar Beach for their breaches of fiduciar duty,

defamtion and unair competition directed at the fir. The goal is not only to ensure that Beach

and Vollero do not wrngfly wrest additional money from Tourdji Capita, but also to ensure

that Touradji Capital's investors are made whole and to repai the damage done by the Beaches

and V ollero. Touradji Capital seeks the retu of all compensation paíd to Beach and V ollero

durng the period of their disloyalty, compensatory daages for all of the defendants'

misconduct in an amount no less than $250 millon, as well as pwutive daages in light of the

knowing and malicious natu of their conduct.

ALLEGATIONS COMMON TO ALL CLAIMS

A. Beach And VoIlero Join Touradji Capital As At-Wil Employees
After Their Main Investor PulIs Out Of Their Prior EmDlover's Fund
16. Touradji launched the Tourdji Global Resoures Master Fud, Ltd. and its

related famly of fuds (the ''TGR Funds") in January 2005, with initial commtted capital of

approl(imately $1 billon, all of which was rased by Paul Touradji.

17. hi the spring of2005, a third par recommended that Touradji spea with Beach

and V ollero, who were then employees of Solstice Equity Management ("Solstice"). At that

time, Solstice was an advisor to the BBT Fund, LP, an entity that managed invesents on behalf

of the Fort Wort-based Bass family.

18. Touradji met with Beach and Vollero on several occsions in or around May

2005. Beah and Vollero represented to Touradji that they had been the portolio managers for

Solstice, and that they had been primarly responsible for ruing the energy equity portfolio

there. Beach and V ollero provided Touradji with a track record purortedy reflecting their

successful performance as portolio mangers for Solstice.

5
 19. Beach informed Touradji that he (Beach) had "built" Solstice, and that he and

V ollero were leaving Solstice beause they wanted to sta their own fud and because,

according to Beach, the Bass famly "didn't know what they were doing," Touradji ha since

leaed that ths was untre: Beach was nothing more than an analyst at Solstice, and Solstice

was obligated to shut down because its pricipal investor withdrew its capita from the fud.

20. At the tie, Beach and V ollero also informed Touradji that they had made efforts

to form their own fud, and had already lined up investors willing to contrbute $500 millon of

capital.

21. Based upon these and other representations (now known to be false), Tourdji

agreed to take on Beach and Vollero, as well as several of their co-workers from Solstice, as

employees ofTouradji Capital.

22. From the beginnng, Touradji made clear to Beach and Vollero that if they joined

Touradji Capita, they would be "at will" employees. Touradji told Beach and Vollero that he

was not considering an arangement where Touradji Capita would simply provide the facilties

for Beach and Vollero to ru their own fud. Intead, Tourdji inormed them that they would

be el(pected to be his eyes and ears on energy equities. Touradji fuer informed Beach and

Vollero that he el(pected them to operate as par ofa team contrbutig to the success of the

overall firm, and tht their compensation would be discretionar and would be based upon all

such contrbutions.

23. Touradji specifically informed Beach and Vollero that he would not agre to any

form of compensation "guarantee." histead, Touradji told Beach and Vollero that if they came to

the Funds and performed well overall, a potential discretonar bonus "pool" could be allocated

to the enti team. Agai however, Touradji made plaí that there were no guartees when it

6
 came to compensation, apar from the $200,000 anual salar Beach and V ollero each would

receive, and that any additiona compensation would be determined in Touradji's sole discretion

based upon their entie contributions and Tourdji Capital's overall performance. Beach and

V ollero agreed to ths and stated that they were happy with ths arangement.

24. As a result, no wrtten contrct was ever entered into beteen Beach, Vollero, and

Touradji or Touradji CapitaL.

25. Contrar to the present lies tht Beach and Vollero have used to prop up their

Amended Complaint, this purely discretionar bonus arangement is reflected in due dilgence

docwnents distbuted to investors in Touradji Capital by Beach and V ollero themselves:

Compensation
The (Tourdji Capita) team members receive a fil(ed salar and a
discretionar bonus which mayor may not be drven by the performance
of the Fund or the performance of the individual traders.

(emphasis supplied.)
26. Not oruy is Beach and Vollero's claim to an absolute entitlement to a majority of

the profit on certain fuds contry to fact, the claim is ludicrous as a matter of industr practice.

Paul Tourdji was the ''key man" for every Touradji Capita-related fud and portfolio, and Paul

Tourdji was responsible for briging in essentially all of the capital that Touradji Capital

managed. The idea that two individuals employed by the firm would themselves be entitled to a

majority oftke profit to be made by Touradji Capital on, among other thgs, trading portolios

for which Beach and V ollero raísed no capita and as to which Beach and V ollero were not even

named as key men, is nonsensical.

27. Beach and Vollero accepted employment with Touradji Capital and reported for

duty in May 2005. Beach and Vollero helped manage investents in the TGR Fund's "OG

Book," a trading book composed of energy equity securties, under Touradji's supervision.

7
 28. Consistent with this sharg of responsibilties - and contrar to their clais that

they were hired purely as portfolio managers from day one -- both Beach and V ollero were

originally identified in Touradji marketing documents as analysts, rather than as portolio

mangers.

29. Beac and Vollero also convinced Touradji to hie other former Solstice

employees as well, including Taylor Beach, Gentr Beach's sister. Vollero in paricular told

Touradji that Taylor Beach was smar, hard working and irreplaceable. Later, afer Beach left

Touradji Capita, Vollero stated that Taylor Beach was incompetent and overpaid.

30. Whle Beach and Vollero were responsible for day-to-day tring decisions in

cOllection with the OG Book, Touradji remaíned the prima portolio manager responsible for

the book, and provided Beach and V ollero with risk maagement and directional supervsion in

collection with their trading activities.

31. hi late 2005, Beach and Vollero lobbied Tourdji Capita to form the ST Book,

which traded both public and private securties.

B. Beach And Vollero Are Paid Miions Of Dollars For 2005

32. The TGR Funds generated meanngfu retus in 2005. At the end of2005, based

in par upon this performance, Touradji Capita awarded Beach and V ollero cash bonuses of $2.4

millon each. hi addition, Touradji Capital awarded Beach and Vollero conditional deferred

bonuses of over $300,000 each. At the time, Beach and Vollero were very appreciative of these

amounts, and never complained that they had not been paid in accordance with a supposed

agreement.

C. Beach And V ollero Fail To Deliver CaDital As ReDresented

33. Touradji DeepRock Master Fund Ltd. and its related family of fuds (the
"DeepRock Funds") were launched in Februar 2006 to focus solely on investing in energy

8
 equity securties. It was anticipated that Beach and V ollero would apply the el(perience they

supposedly obtaíed managing energy equities at Solstice to assist in managing the DeepRock

Funds under Touradji's supervsion, and would bring at least $500 milion of dollars in

supposedly committed capital to the Fuds.

34. By the spring of2006, however, it became evident that Beach and Vollero did

not, as they had ealier represente, have commitments for any meagfl amount of capita.

35. Also by that tie, inormation had begu to surace suggesting tht Beach and

Vollero had misrepresented their el(perience at Solstice. Specifically, while Beach had described

himself to Tourdji, as a "founder" and portolio maager of Solstice and Vollero had simlarly

described hielf as a portolio manager, the Chief Operating Offcer of Solstice, Ken McCar,

when asked by Touradji to confrm the information provided by Beach and V ollero, stated in par

as follows:

It is my recollection. . . that Mr. Beach was neither a "founder" nor a "member"

of Solstice, but worked as an employee for Jon Olesky, who was the portolio
manager for the tie period ofthe retu history.

36. When questioned about these inconsistencies, Beach and V ollero inormed

Tourdji tht McCar was out to get them for "political" reasons. Beach complaíed that

Olesky was an impediment to makng money, and insisted tht Beach and Vollero were

responsible for Solstce's track record. Beach, in parcular, stated that Olesky "didn't know

anytg about anytng."

37. In light of Beach and Vollero's representations, and in light of the positive

perormance of the TGR Funds in 2005, including the OG Book, Touradji continued to allow

them a certain degree of discretion in making the day-to-day trading decisions for the energy

equity books under his supervision.

9
 38. As it tued out, however, Beach and Vollero's misrepresentations concerning

their roles at Solstice were only the beginng of a pattern of similar lies.

D. Beach And V onero Cause The Small-Can Debacle In 2006

39. By the sprig of2006, Touradji had become concerned about the size of the

positions that Beach and Vollero had built up in varous relatively iliqud small-cap energy

equi securties. When Tourdji el(pressed these concern to Beach and V ollero, they assured
him that they were comfortable with the size of these positions.

40. In May 2006, however, the equities markets e¡¡erienced an across-the-board sell-

off. Small cap energy equities suffered signficantly in the May sell-off and continued to

langush for the following months. As Vollero himselfIater admtted, "they became an out-of-

favor asset class. Investors generally felt trapped in these names, liquidity dred up, and the

stocks suffered to the downide when the energy sector sold off but did not paricipate in the

upside moves."

41. In addition to these substantial iliquid small-cap positions, Beach and V ollero

had accumulated signficant concentrated positions in a number of companes. These positions,

which also were iliquid, also suffered durg and afer the market sell-off and liquidity cruch of

May 2006.

42. As V ollero later admtted, the poor performance in these two classes of securties

combined to have a "dramatic effect on (the Funds') P&L" in 2006.

43. Shorty afer the May 2006 sell-off, Touradji took control of the energy equity

book, and immediately undertok effort to liquidate as many of the small cap positions as he

could at a reasonable price. As V ollero later admitted, the Funds were able to do ths "largely

due to a very adroit view (Paul Touradji) had as to market appetite for these tyes of investments

through the coure of the year."

10
 44. By late 2006, Touradji had successfuly reduced DeepRock's small cap el(posure

and had cut DeepRock's concentrated energy equity el(posure as well.

I 45. Reducing the size of these positions at an acceptable cost, and thereby restoring

liquidity to the Funds, requied Tourdji himself to devote substatial time and effort to

managiog and repaíng the energy equity book.

46. In sumizing what had gone wrong in 2006, V ollero admitted tht he and

Beach had had limited the equity book in 2006 to "mostly illquid crap." Vollero also admtted

tht he and Beach had "totally messed up" by accumulatig such a large volume of iliquid

investments. He also flatly admitted that ths "wasn't PT's (Paul Touradji's) fault, it was ours

(referrg to himself and Gentr Beach)."

47. Despite Vollero's contemporaneous adissions that ¡ie and Beach were

responsible for the "small cap blow up," as he referred to it at the time, and that Touradji had

been largely responsible for getting them out of the mess they had created, he now seeks to

blare Touradji for these events io an effort to create a false record in support of his

compensation claims.

E. Beach and Vollero Are Well Compensated

For 2006 Despite Their Poor Performance
48. Despite Beach and Vollero's substadard trng performance in 2006, Touradji

Capital nonetheless paid Beach and Vollero each a $1 milion bonus for the year in an effort to

encourge them to work toward improviog their futue performance. At the time they were

awarded these amounts, neither Beach nor V ollero complained, nor did they sugges that there

el(sted an ageement under which they were entitled to a majority of the profits of parcular
trading books they purortedly managed. Even if there had been such an agreement, by tht

II
 measure they would have been entitled to nothing, or indeed less than nothing, for their

performance in 2006. Instead, they were paíd $1 milion each.

49. Yet in their Amended Complaint, Beach and V ollero now claím an entitlement to

over $5,0 minion in bonuses eared for their supposedly successful work in 2006, with no

mention at all of the small cap blow up, or the fact that their poor management forced Touradji to

place severe constraíts on their trdig discretion and tighten all risk controls.

F. Beach And Vollero's Lackluster 2007 Performance

50. After a tuultuous 2006, 2007 was a quieter year. Whe the ST Book

el(perienced sizeable losses, the OG Book and DeepRock retued respectable retu due to

Touradji's increased involvement in managing those portolios.

51. By mid-2007, however, contemporaneous documents show, Beach's severe

"weakesses" had already become a serious issue and soure of internal debate among his co-

Plaintiff Robert V ollero and others. In parcular, these documents reflect that it had become

clear to Robert Vollero and Benjam Bram, a Tourji Capita equities trader, that Gentr

Beach simply lacked the skills and intellgence necessar to manage an equity securities

portfolio.

G. Beach And Vollero Construct And

Supervise An Abvsmal Private Equity Effort
52. Wholly aside from their failures in manging of the Firm's public equities, Beach

in parcular was responsible for a disastus series ofinvestments in Touradji Capita's private

equity portolio. Notably, Beach and Vollero do not even mention in their Amended Complaít

their key roles in building and managing the Funds' private equity portolio. That is because the

reults of that effort were so bad tht they canot be squared with an after-the-fact claim for $50

millon dollar in additional compensation.

12
 53. Vollero himselfhas admitted that Beach was responsible for rung private

equity at Tourji. In late 2007, Vollero wrote tht Beach "should contiue to spend a lot of
his

time as the point person on priate equity. . . ." (emphasis added).

54. hi fact, even Gentr Beach's father has testified under oath tht Gentr Beach was

in charge ofTouradji's private equity portolio:

Q: Who did you understad to be wa responsible for Tourdji's

private equity investments. . . ?

A: Well, Gentr was.

55. Yet tre to form, since fiing his lawsuit, Gentr Beach has misrepresented under

oath his role in overseeing the private equity portolio, denying that he wa responsible for that

effort. But again his co-plaintiff, Robert Vollero, admttd the trth in an e-mail wrttn in 2008:

(G)entr spent a few year running our private equity practice

and, to be honest, ths wa not somethg for which he was well-
suited. Our PE effort has been disappointig and chaotic and it
has shown up in the results (e.g.) (Madagascar Oil, which resulted
in a hundred milion dollar wrte down).
56. "Disappointing" and "chaotic" are understtements. Madagascar Oil resulted in a

wrte-down of over $100 milion, and Playa Oil and Gas LP tued into a vehicle by which

Gentr Beach and his father absconded with $500,000 ofinvestor capital and are now seeking

millons more though fabricated clais of fraud.

H. Playa Oil & Gas: Beach Creates And Takes

Advantage Of A Conflct or Interest To Benefi His
Father. And The Two Men Abscond With Investor Capital
57. hi marketing hiself to Touradji Capita in the spring of2005, one of Gentr
Beach's selling points had been hi family's supposed decades of el(perience in the oil and gas

industr.

I3
 58. Thus, shortly afr joinng Touradji Capita, in the sumer of2005, Gentr Beach

proposed that the TGR Funds inves in a private oil and gas parnership to be manged by Gentr

Beach's father, Gar Beach.

59. Prior to that time, Touradji Capital's investigation ha now revealed, Gar Beach

had been attempti without succes to locate outside investors to fud a proposed driling

project.

60. hi persuading Tourdji to approve the investent on behalf of the TGR Funds,

Gentr Beach falsely represented that his father was an experienced businessman with a history

of successfully locating and developing oil and gas propertes, and that his father was being hotly

pursued by other potential investors. He and his father also reresented that they possessed

valuable rights to oil and gas properties that would be contrbuted to the ventue.

61. Based upon Gentr Beach's representations as to his father's el(perience and

abilities, as well as their representations concerng the valuable oil and ga interests that they

owned, Playa was established in October 2005. Though afliates, Touradji Capital controls

Playa.i

62. Beach Capital Parership, 1.P. ("Beach Capita LP), a limited parnership

controlled by Gar Beach, is a limited parer of Playa.

63. Gentr Beach and Vollero spearheaded the negotiation of the Playa LP

parnership agreement (the "Original LP Agreement"), which Gentry Beach signed on behalf of

Touradji Capita.

The name ofTourdji Capital's affliate that made the investment and acts as a limited parer in Playa is
DeepRock Ventu Parers, LP C"DeepRock Ventu"). For puroses of
this pleading, we refer to DeepRock
Ventus as ''Tourdji CapitaLn

14
 64. Under that Agreement, Touradji Capita contrbuted every dollar of the capital

that went into Playa. That money, of coure, was investor capita. The Original LP Agreement

required that Touradji Capital contrbute only $8 milion of intial capita, and set a ma¡imum
capital contribution of $3 0 millon.

65. The Orginal LP Agreement required that Gar Beach contrbute "(a J II rights,

title, and interest" in a varety of oil and gas leaes, prospects and joint ventures.

66. At the time Playa was formed, and over the nel(t few years, Gar Beach

represented that the interests he contrbuted were wort millons of dollars.

67. hi reality, and contrar to ths representation, Gar Beach contrbuted nothing of

economic value to Playa. histead, what Beah Capital appears to have "contrbuted" to Playa is

the opportwuty to pay milions of dollars to acquire and develop certin oil and gas propertes

located in remote, barely accessible swampland in souther Louisiana. No "leases," no

"propertes," and no "Prospect Generation Joint Ventues" of any value were contrbuted to

Playa.

68. In fact, in an audit memo wrtten by Playa's auditor in 2007 - but not provided to

Tourdji Capital until it was subpoenaed in litigation - the auditor concluded as follows with

respect to Beach's purorted contrbution to Playa:

"Beach had no basis in the assets. There was no determinable value to the
assets. "

69. Even worse, Touradji Capita's investigation has reveaed that - in another

egregious conflict of interest -- Gentr Beach himself possessed an undisclosed personal financial

interest in one of the entities allegedly constituting these supposed propertes, an entity caled the

"Beach Energy Group." Gentr Beach flatly misrepresented to Touradji Capita at the time that

he possessed no such interest.

15
 70. In addition, at the outset of Playa the pares contemplated that Ga Beach would
receive a porton ofthe profits of Playa only afer Touradji Capital and its investors received the

full retu of their initial invested capitaL.

71. By early 2007, however, an employee of Touradji Capital, Holbrook Dom, had

reviewed the Original LP Agreement and concluded that it was not suffciently clear on this

point. Dam therefore spoke to Gentr Beach and Rober V ollero about the issue.

72. Beach and Vollero both specifically confined that the intent of the paries had

been that Touradji Capital should recover all of its invested capital before Ga Beach became

entitled to shar in any assets held or distrbuted by the parership. V ollero even stated to

Gentry Beach in Dorn's presence: "You need to fix this," and Beach promised that he would do

so. Dorn thereafer spoke directly with Ga Beach, who confined his agreement to these

terms.

73. Gar Beach also communicated ths agreement to Playa's auditors at around this

same tie. Specifically, in an audit work paper dated December 31, 2007 (but agaín, only

recently provided to Touradji Capital pursuant to subpoena), the auditor wrote:

Per G. Beach. . .

The parers have verbally agred that (Touradji Capita) would

recoup all their investments before Beach Capita Parerslup, LP
receives any payments.

74. Neverteless, succumbing to the conflct of interest posed by his father's

involvement in the transaction and placing his family's interests directly ahead of
those of
Tourdji Capital's investors, Gentr Beach purosefully failed to obtaín his father's wrtten

acknowledgement of this arangement, aiid the two men now deny tliat Touradji Capital was

entitled to recoup its invested principal before Gary Beach would be entitled to share in profls.

16
 Even more egregiously, the two men now claim in a lawsuit that Gar Beach is owed $8 millon

of investor capital that was previously distributed to Touradji Capita as a retu of principal.

75. Based upon the understading tht Touradji Capital was to receive a retu of its

invested capita prior to Gar Beach's sharing in the profits, Gentr Beach recommended, and

Touradji Capita agreed, to contiue to contribute millons of dollars to Gar Beach's oil and gas

e¡¡loration efforts, including milions of dollars in el(cess of the $8 milion in principal

originally committed. Touradji Capital did so, only to find that the Beaches now claim an

absolute and automatic entitment to 20 percent of that money. hi other words, the Beaches

now clai that the agreement entitled them to 20% of every investor dollar from the day that

money was delivered to Playa.

76. In addition, as set forth in more detil below, Gar Beach later absconded with

$500,000 dollar of investor capita and was forced to admit under oath that he secretly shared

that money with Gentr Beach.

77. Under Gar Beach's management, Playa was profoundly unsuccessful in drllng

for oil and gas, losing millons of dollars on an operating basis in 2006 and 2007. Gar Beach

was so unsuccessful that, by mid-2007, he had concluded that Playa should be shut down and all

of its assets sold. On August 28,2007, Gar Beach sent Gentr Beach (but no one else) the

following email:

Gentr,
I reommend that Playa sell i 00% of each of the prospects it has
leased and not tae anymore driling risk. We should only lease a
new prospect afer we have sold a prospect and recovered our lease
costs. The money we have will be used to clea up our curent
projects so they can be sold. As soon as practical, we should sell
each producing propert. I do not plan to draw down anymore
money from Touradji. My thoughts on Playa's plan going
forward stem from our lack ofsuccess and the cost to drll wells.

17
 Let's visit.

GMB

78. However, in clear breach of his fiduciar duty to Touradji Capital and its

investors, Gentr Beach did notforward this emau 01' otherwise share this information witli
,

anyone else at tliefirm.

I

79. Intead, Gentr Beach falsely represented to Paul Touradji that Playa was an
i

ememely successful and valuable ventue, thereby inducing Touradji Capita to contrbute
II müIions of dollars in additional capital to Playa.

80. Whle the Origial LP Agreement had obligate Touradji Capital to commt only

a minium of$8 millon to Playa, by late 2007, Touradji Capital's investors had commtted in

el(cess of over $40 milion - or five times the amount of capital required by the agrement.

i. Beach Is Demoted Back To Analvst

81. By the end of 2007, Touradji was convinced that while the Funds had performed

well overall up to tht tie, factors withn Touradji Capital- including Gentr Beach's inerent

weakesses and poor performance - necessitate a restrctug of the Firm. hi ths connection,

on November 30, 2007, Touradji wrote to the employees ofTouradji Capital, including Beach

and Vollero, asking that they contrbute their thoughts as to how best to allocate the firm's tie

and resources going forward. A key aspec of this process was dealing with the widely

recognzed weakesses and faílings of Gentr Beach.

82. Vollero responded on December 5, 2007. With regard to his co-plaintiff, Gentr

Beach - a man presently seeking $25 millon based upon the fiction that he was a successfu

portolio manager at Touradji Capita -- Vollero recommended as follows:

18
 Gentr. . .

(wJe nee him to be spending less tie staring at tickers. Seems

simple but it is very important. .. I actually think he should
be more removed from portolio decisions - doesn't have the
right temperament, often does tbings rashly not in
concordance with research or trading views (a source of much
frustration for many on the team), and lacks a sense of how the
portolio is actually structured.

(emphasis added.)

83. Thus, by early 2008, Gentry Beach had proven to be entiely incapable of

performg the principal fuction that he claimed to be able to perform - acting as a portolio

manger.

84. hideed, V ollero also admitted to Beach - while witholding the inormation from

anyone else - that he and Beach "just look at tickers and go with them when we need something

to buy and when we nee something to selL." Ths, of course, is precisely the opposite of how

portolio managers are supposed to fucton.

85. Based on his own observations and the additional feedback he received, Tourdji

instrcted Beach and V ollero that Beach should no longer be involved directly in portfolio

management, and should instead begin again to fuction as an analyst.

86. Then, in early 2008, Beach himself wrote: "1 am oficially (sicJ an analyst again."

Later tht year V ollero admitted that Gentr had long been "fuctioning as an analyst and not a

PM."

87. Thus, well before they fied their lawsuit based on Beach's supposed role as a

portolio manager, both Beach and V ollero admttd that Beach was, in fact, acting as a mere

analyst at Tourji CapitaL.

19
 88. At arund that same time, Tourdji organzed a meeting of all members of the

equity tea el(cept Gentr Beach, and asked them how they felt Beach had performed in

manging the team. The team members wuformly respnded that Beach was not a good

decisionmaker or manager, and lacked the skils to manage a portolio.

J. Beach's Failures In Private Eauity Come To Liiiht

89. In Marh of 2008, Tourji leaed that the CFO of Playa had resigned weeks

earlier, but neither Beach nor anyone else on the private equity team had shared tht inormation.

Tourdji inediately called for an investigation.

90. Based upon ths investigation and other factors, including Gentr's increasingly

apparnt inabilty to manage the conflict ofinterest with his father on Playa, Touradji deterined

that it was in the best interest of the Funds to remove Gentr Beach from his role as the

manger of private equity. Thus, in March 2008, Tourdji informed Beach tht he was no longer

responsible for private equity, and should have no involvement in any private equity projects

going forward.

91. Beach blatantly ignored these instrctions. Beach continue to inject hielf into

the private equity business, accepting meetings with outside pares about potential investments

and, in parcular, involving hielf directly in Playa-related matters, including by corresponding

sueptitiously with his father, Gar Beach.

92. In June 2008, Beach received the following wrtten warg from Touradji

Capital's CFO:

We have conveyed to you before, on several occasions, that due to your

subpar performce in leading our private equity practice, violations of
fi protocols, and due to certain confict of interest situations with our
investment in Playa Oil, you were to immediately and completely cease
your involvement in the private equity practice and focus your effort
solely on public equities in purely an analyst capacity. The instrctions
were clear and unarbiguous. Any attempt on your end to interfere with

20
 the pratice, whether well intentioned or otherwse, is a clear violation of
our instrctions and will have severe consequences to your continued
employment at Touradji Capital.

I am writing you ths memo because you have been, yet agaín, found to
be violating these very clear instrctions. Make no mistaes tht you
have been in clear violation ofthese firm protocols, as well as
insubordinate to specific instrctions you were given. The fact that these
instructions were given to remediate your poor performance and
behavior only makes the matter more serious.

93. hi addition, by 2008, massive problems with two other Beach-inspired

investments, Madagascar Oil and Kataga Mines, cae to light. Touradji Capital invested tens

of milions of dollar of investor fuds in each of these investments at Beach's encourgement.

94. In 2006, the Madagascar Oil investment had been valued at $2.50 per share.

Under Beach's watch, the value of ths investment fell to $0.01 per share, reslting in a

writedown of over $100 million.

95. Kataga Mies also resulted in a substantial loss. Notably, Beach was drven by a

conflct of interest here as well: He pushed the investment in Kataga in par in an effort to

generate a "fider's fee" for his uncle, Jeff Gentr. Despite Beach's entreaties in support of such

a fee, Touradji Capita refused to pay one. However, Tourji Capital has now discovered that

Beach ignored ths instrction as well, and secretly agreed with his uncle Jeff Gentr to pay him

a percentage on the Kataga Mining tranaction.

K. Beach ADolol!izes For His ReDeated Failures And Misconduct

96. On June 25, 2008, Beach called the entÌIe sta ofTouradji Capital into a

conference room, and apologized to everone for dropping the ball on pnvate equity. Beach

promised to make up for every dollar ofIost P&L that he had cost the firm.

97. One employee who responded to Beach's apology by emaíl told him that it had

been "the right thing to do."

21
 98. Now, of coure, Beach denies that the apology was sincere, and takes the position
I
that he only made the apology in order to obtan money.
!

L. Beach's Demotion Is Communicated To Investors

99. hi a conference cal on July 8, 2008, Touradji communicated to investors that

Beach had bee strpped of responsibilty for private equity, and had been demoted to the

position of analyst.

100. In anticipation of these investor discussions, Vollero wrote down his own

suggested talking points. With regard to Beach, V ollero wrote as follows:

GB Change

(O)ne change that is of note is the fact that (Gentr Beach) is

functioning as an analyst and not a PM. . .. Additionally,
gentry spent a few years running our private equity practice
and, to be honest, this was not something for which he was
well-suited. Our PE effort has been disappointing and chaotic
and it has shown up in the results e.g. (Madagascar Oil). We
have been moving ths way for some time and have had the
inormal arangement of Gentry functioning as an analyst for a
while... .

(emphasis added.)
\01. Thus, by the admssion of his own co-plaíntiffand best frend Robert

V ollero, Gentr Beach was not only fudamentaly incapable of actig as a portolio

manager, but he also had faíled at the only other role he ha held at Touradji Capital-

acting as the "point person on private equity."

102. What Touradji Capital did not know at the time, but has since leaed from its

investgation, is that with VoIlero's ful knowledge and complicity, Beach also continued to trade

for the Funds' accounts afer el(plicit instrctions that he not do so. This constitutes a separate

and egrgious breach of Beach and Vollero's duties to Touradji Capital.

22
 M. Beach And His Father Implement Their
i
Conspiracv To Abscond With Capital From Plava
I 103. Meanwhile, Beach was in dire finacial straits as a result of his consistently living

beyond his mean.

104. hi addition, the Funds' investment in Playa - the investment brought to the Funds

by Gentr Beach and managed by his father - was in deep trouble. By May of2008, Touradji

Capital's investors had contribute $41 milion, or five times more capital than wa require

under the Original LP Agrement.

105. It was not until May 2008, however, that Touradji Capita el(ecuted amendments

to the Playa LP Agreement confirming the paries' agreement tht Touradji Capital was to

receive a retu of all of its investment capita prior to any distbutions being made to Beach

CapitaL. It did so only afer a representative ofTourji Capital discoverd that Gentr Beach

had never documented the acknowledgement by Ga Beach confinng this agreement.

106. The Amended LP Agreement el(plicitly sets fort the paries' intent that Tourji

Capital would recover all of its invested capita before Beach Capital began to share in any

profits.

107. Ga Beach wa involved in the drafing of tht document, and signed the

Amended LP Agreement on May 9, 2008.

i 08. Two days afer Gar Beach signed the Amended LP Agreement, he requested tht

Tourdji Capita contrbute an additional $1 million to Playa. hi reliance on Gar Beach's

having signed the Amended LP Agreement, the money was wird to Playa.

23
 N. Beach And V ollero Invent Claims Of Constructive Dischal1e
109. By August of2008, Gentr Beach, his father, and Vollero were aleady secretly

discussing how best to concoct Beach and Vollero's frudulent claíms for additional

compensation. Thus, on August 25, 2008, Gar Beach wrte to Gentry:

The questions and actions are logical:

Are you going to pay Rob and me for 2007? If yes, when? Ifno, why
not?

Anytng more than than 2-3 days on being paid is unacceptable.

If you get paid for 2007, have your lawyer put your trde in wrtig for
2008 and let hi know it's coming..

Afer you get your trade in writing or if he refuses to give you your
trade in writing, draw out all monies you have in the fund.

Dad.

110. Notably, no mention is made of alleged compensation owed for 2005 or 2006 - as

is now demanded in the Amended Complaínt.

11 i. A central asect of Beach and Vollero's claim is that Beach was "compelled to

resign" from Touradji Capita as a result of theats directed at hi on September 25,2008. Ths
is false. histead, evidence uncovered afer Beach left Tourdji Capita reveals that well before

Tourdji's supposed "theats" were made, Gentr Beach had aleady made plans to leave the

fir and to sta his own fud, and had even hired an employee.

112. For el(ample, Beach's new employee, Thomas Page, wrote to Gentr on

September 2, 2008, weeks before Beach was supposedy forced to resign:

Now that you are my boss I need some instrction on what I need to
sta learg, what to read, what networking technques I need to pursue,
and who I should be spending time with. I know we are going to tae
thgs slow, but I'd like to sta preparng for what it is we will be doing,
ie. raising capital, what deals to avoid, how to pursue and who, etc. As

24
 I
we discussed I am going to be deferrng al deals presented to me your
.1 way.
i

I am el(cited about the futue and appreciate your guidance.

By the way, I'm in our offce now and the new contact information is as
follows:

Tom Page/Gentr Beach

100 Highand Park Vilage
Suite 200
Dallas, Texas 75205

Tel: 214-295-3033

Th you in advance for your timely response,

Tom

113. Thus, a key premise underlying Beach an Vollero's claim for compensation--

that the two men were forced to resigo and otherwise would have remaíed at Tourdji managing

capita - is false. histead, the two men never intended to remaín at T ouradji CapitaL.

1I4. As par of his claim for "intentional infiction of emotional distress," Beach also
alleges, falsely, that on September 25, 2008 Touradji theatened to "ruin (Beach's) marage,"

even if it meat "saying thngs that were untre." This contrved allegation was made, it is clear,

to anticipate the suracing of admissions by Beach showig that he, long before September of

2008, had "ruined" his own marage. The deep problems that el(isted in Mr. Beach's mariage

were of his own makg, and Beach's effort to tu ths into misconduct by Touradji is

emblematic of Beach's willingoess to lie when it suits his nee.

115. On September 25, 2008, Gentr Beach approached Paul Touradji, theatened him,

and demanded money. When Touradji told Beach that he would not respond to such el(ortion,

Beach stated: "Then rny father and I will just tae it from you and your investors. You don't

25
 know what we are capable of." Beach then theatened to "destroy" Touradji Capital and stormed

out of the offce.

1 i 6. Soon afr he left Touradji, Beach fied a false police report - not because he felt

theatened, but because he was urged to do so by his Uncle, Jeff Gentr. Notably, Gentr Beach

is a hulkg former football player and an aggressive weapons collector and hunter -- once

wrtig to his friends, for el(ample, that "(tJhere is never enough death."

117. Accordingly, the idea that Beach felt theatened in a conversation with Paul

Touradji over compensation is ridiculous. And not surrisingly, Beach's police report was never

the subject of any real investigation - Tourdji Capita leaed about the report only though

. Beach's complaínt and has never been contacted about it otherwse.

O. Beach and His Father Abscond With Investor Capital

118. On September 24, 2008, two days before Gentr Beach (falsely) claíms that he

was compelled to resign from Touradji Capital, his father, Gar Beach, sent an e-mail proposing

that Playa distrbute cash to himself and to Touradji.

119. Touradji Capital responded imediately, instrcting Gar Beach not to distbute

any fuds at alL.

120. Yet on the night of September 25, 2008, while Gentr Beach was still an

employee ofTouradji Capita, he and his father discussed by telephone makg a distbution of

Playa's capita the nel(t mornng. At the time both knew that Tourji Capital had aleady

inscted Gar Beach not to distrbute any capital from Playa.

121. Then, on September 26, 2008 - the same day that Gentr Beach resigned from

Touradji Capital- Gar Beach distbuted $500,000 from Playa LP to an account he controlled.

122. Gar Beach has admitted under oath that the distrbution violated the terms ofthe

Playa parership agreement, and that - consistent with Gentr Beach's theat on September 25,

26
 2008 - that he later shared a portion of
the unauthorized $500,000 distrbution of investor fuds

with Gentry Beach.

123. A few days after takng the Playa capital, Gar Beach fied a lawsuit claímig that

he is entitled to 20% of all of the cash and assets tht are now, or ever have been, held by Playa.

hi other words, Gar Beach clais an automatic right to 20% of every dollar ever invested in

Playa by Tourdji Capital's investors. He denIes that the amendment that he signed in May of

2008 is valid, and thus demands $8 milion dollars of

investor capital from Playa.

124. Not surprisingly, Gentr Beach now falsely claíms that his father is correct,

plaínly hoping to share in that invesor capital.

125. Touradji Capita responded to ths unlawf distrbution by, among other things,

immediately demanding access to Playa's books and records, seeking to el(ercise its contractual

rights to control Playa, and by filig counterclaims. Not only did Gar Beach deny Touradji

Capital access to the records, but immediately after he was ordered by a cour to tu over the

records, Gary Beach destroyed liundreds of Playa records in violatum of

that same court
order.

126. Tourdji Capital has also leared that Gar Beach lied to Playa's auditors about

the imprope September 2008 distrbution.

P. V oIlero Remains At Touradji Capital In

An Attempt To Manufacture A Lawsuit

127. Followig Beach's contrved depare from the firm on September 26,2008,

VOiiero remained at Touradji Capital for thee additional months for the purose of gathering

inormation to assist Beach in his claíms, and to manufactue a basis for his own lawsuit againt

the fi.

27
 128. Notaly, during that period, V ollero emphatically represented to Touradji and

others at the fi that he had ended any asociation with Beach, aod routinely criticized the

Beaches, callng their actions with respect to Playa "despicable." All of ths was apparently just

another set oflies that V ollero told to fuer his own interess, given that he aod Beach soon

thereafer formally became paners in the V ollero Beach Funds.

129. In terms of his own compensation, prior to leaving the firm, Vollero came to

Touradji and demanded that he be paíd $10 millon immediately or he would go to the

newspapers in support of Gentry Beach's false story. Notwithstading VOiiero's plaín fiduciar

duty to the firm and its invesors to assist with the Playa litigation, V ollero fuer stated that if

Touradji wanted Vollero's help on that litigation, Touradji would have to pay him the $10

millon. Vollero, too, stated that if Touradji Capital did not pay hi he would destroy the firm.

130. In addition, V ollero created false "notes" of his conversations with Touradji. In.

those notes, Vollero sought to blame the 2006 small cap debacle on Touradji - despite Vollero's

having admitted in writing at the time of those events that he and Beach had been to blare for

that problem.

13 1. As set forth in more detal below, soon after leaving Touradji Capita in

December 2008, V ollero formally joined in a new investment parership, the V ollero Beach

Funds, with Gentr Beach.

132. Tourdji Capital has since discovered that upon leaving the finn, Beach and

Vollero took with them confdential and proprietar inormation regarding the Funds' tradig

positions, as well as Touradji Capita reseah, in breach of their duty to Touradji Capita aod its
investors.

28
 133. Touradji Capital has demanded the retu of that information, yet Beach and

V ollero have refused to retu it.

134. hi addition, in meetings with e¡istig Tourdji Capital investors to market their

new fud, Beach and V oller have made false statements concerng their supposed agreement

at Touradji Capital, and about Touradji Capital's dealings with Amaranth, as set fort in more

detal below. hi paricular, they have stated that Tourdji "broke his word" and breached a

contrct with them, and that Tourji Capital violated an alleged "no trade" agreement with

Amaranth durng negotiations for the purchae of Amarth's metals book. These sttements are

false.

Q. Beach And Vollero Raise Capital For The Vollero Beach

PartnershiD Bv MisreDresentinl! Their Track Record And Roles

135. As described above, Beach and Vollero left Tourdji Capital and promptly set up

their own competing investment firm, the V ollero Beach Funds.

136. The Vollero Beach Funds seeks the same type of investors as those who invest in

fuds manged by Touradji CapitaL.

137. hi their promotional materials, Vollero and Beach have falsely and in bad faith

sought to tae sole credit for the success of the fuds they maaged under Tourdji's superision
and guidance, and now claim sole ownership of the methods they used in managing such fuds.

They also are misrepresenting Gentr Beach's role as that of a portolio maager, and are

misrepresenting their investment "strategy" and methods.

138. The promotiona materials identif both Beach and Vollero as former "portolio

managers" for Touradji Capital. Beach and V ollero state that: "Most recently the team traded at

Touradji Capital management, where they were responsible for managing commodity equity

portolios as well as Touradji DeepRock, a fud which invested solely in energy equities." With

29
respect to "Team El(perience," they state: "Profitable - Consistent and profitable history of

trading commodity equity strategies, posting positive anual returns each year since inception of

the strategy in 2001." In their respective biographical sketches, each states that he "was an

equity Portolio Manager at Touradji Capita maiagement, a New York based commodity

focused hedge fud with assets tht grw to el(ceed $3Bln."

139. In addition, as set fort above, by both Vollero's and Beach's admssion, Gentr

Beach did not even fuction as a portfolio manager - and was indeed incapable of doing so

because he lacked the basic skills required for that role -- and instea fuctioned as an analyst

durg an el(tended period of time at T ouradji CapitaL. It is fase and misleading and constitutes

unaír competition to portray Beach as a portolio manager but fail to disclose that he was

incapable of performing that fuction and was demoted to analyst.

140. As Beach and Vollero are awar, it is the position of the SEC that "it may be

misleadig for an adviser to advertise the performance results of accounts managed at an

employee's prior place of employment when the employee had been one of several persons

responsible for selecting the Securities for those accounts." In re HorIZon Asset Management,

LLC, 1996 SEC No-Act. LEXIS 770, at *5 (Sept. 13, 1996).

141. Contrar to SEC requirements, the promotional literatue does not inform

investors that Beach was not, in fact, acting as a portolio manager at the time he left Touradji

Capital; that both men were subordinate to and used the methods and skills developed by Paul

Touradji; that Paul Touradji was the key man responsible for managing the portfolios for which

Beach and V ollero claí sole credit; and that the two men do not have or use an el(tensive

proprieta network, or a "fudamental research-driven approach in their investment

management activities." As V ollero has admittd in e-maíls to Beach, the two men actually just

30
 stare at screens and trade for the sake of tring. In fact, if the men do claim to use any

"proprietar" methods, they are methods that belong to Touradji Capital because they were

developed, if anywhere, while the two men were employed there.

142. As set fort above, these marketing materials ar false and misleading, and

constitute unaír competition.

143. Notably, Beach also falsely represents to the investing public, though his

Bloomberg profie, that when he was an employee at Morgan Staney prior to Solstice, he was a

"money manager." That statement is false. Beach had no role in managing money at Morgan

Staey.
144. In addition, the Vollero Beach Funds have relied on proprietar tradng data and

investor information that V ollero and Beach misappropriated when they left Tourdji.

R. Beach And Vollero Manufacture Claims

Of Improper Tradinl! Bv Touradii Capital
145. Since leaving the fi, Beach and Vollero have embarked on a campaígn to

damage Touradji Capital by disparaging the fi in the press, in the marketplace, and in their

commwucations with potential investors in V ollero Beach Funds.

146. In addition, V ollero and Beach have intentionally disparged Touradji Capita in

connection with the firm's acquisition of Amaranth Advisors' metas trading book. As set fort

below, Touradji Capital's dealings with Amaranth were entirely appropriate and in full

accordance with the pares' agreement. For tht reason, no person had ever raísed a question

about Tourdji Capital's conduct in connection with that transaction unti the Beaches and

V ollero began energetically spreading false ruors about supposed misconduct afer Gentry

Beach had left the fi.

31
 147. The facts are these: In mid-September 2006, at a time when Amaranth's

precarous position was well known publicly, Amth approached Touradji Capital in an effort

to unoad cert base meta positions. Even before entering into any agreement, Amanth had

described aspects of its metals positions to Touradji Capita, and had informed Touradji Capital

that Amaranth's metals book was "messy."

148. Touradji Capital offered to bid on the book, and was informed that it was one ofa

number of such bidders. In anticipation of the trsaction, Touradji Capita and Amarth
negotiated a wrttn confidentiality agreement. As par of that process, Touradji Capital

specifically negotiated for, and obtained, an acknowledgment by Amarth that Touradji Capita

"may hold long or short positions in derivat(iv)es or other instrents that may be the subject of

a tranaction," as well as an acknowledgment that Touradji Capita "may trade or otherse

effect transactions for (its) own account. . . in such derivatives or other instrents. . . ." hi

other words, Tourdji Capital was entitled by contract to continue to trade base metals at all

times - a right it el(pressly preserved so that it could manage its e¡¡sting metals portolio.

149. Touradji Capital immediately analyzed Amaranth's metals book, assessing the

overall portolio with a thoroughness and speed that few, if any, other market paricipants were

capable of. Amaranth's metals book, Touradji Capital eventually leared, consisted of over

1,200 positions in varous base metas, including a varety of complicated option and spread

strctues. Touradji Capital worked diligently with Amaranth to sort out varous issues and

discrepancies in the inormation provided by Amarth. The natue of

the tranaction required

Tourdji Capita to tae on siguficant market and interest rate risk, to assess and take

responsibilty for deep-in-the-money options, to pay over a quarr of a bilion dollars of its own

cash just to purchase the options positions, to make additional margin payments for many futues

32
 and options positions, and, finally, to tae on the credit risk of Amaranth, a fud that was then in

the process ofimploding.

150. But most importtly, in the few trading days between the signng of the

confdentiality agreement and the close of the transaction, Touradji Capita did not in any respect

take advantage of the Amarth information in connection with its propriet trailng.

151. On September 28, 2006, the traction closed. Since that tie, Touradji Capita

has itself borne the entire risk inherent in the book. hi the thee years following the transaction,

and until it made its recent cour filing, Amaranth had never, in any contel(t, complained or

raísed any questions about Touradji Capital's conduct or its trading activites. Indeed, soon afer

the close of the transacton, Amarth asked for Touradji Capital's assistance in unwidig

adiltional positions.

152. The fit mention of any improper conduct with respect to Amaranth arose in the

litigation commenced by Gentr Beach's father in connection with Playa. In that case, Gar

Beach admitted that Gentry had told him about the Amaranth transaction, and in parcular that

allegedly improper trading had occured in connection with that trsaction.

153. By that conduct alone, Gentr Beach breached his fiduciar obligation to Touradji

Capital by disclosing - for his own benefit- confidential inormation about Touradji Capita's

involvement in the Amaranth transaction. Even worse, of course, is that Gentr Beach lied about

what had occured.

154. For years following ths trsaction, no person from Amaranth or anyone else has

ever even suggested that wrongdoing occured in connection with ths transaction. However,

after Beach and Vollero left the fi, and in connection with the lawsuit commenced by Gar

Beach, th Beaches and Vollero began saying that the trsaction with Amarth was improper.

33
;
At fist, the men staed that Touradji Capita had entered into a "no-trde" agreement that

I
prohibited it from trading Amarth's positions at all durg the period of the paries'
negotiations. That was false.

155. After these allegations got Gar Beach nowhere in Tel(as, the Beaches and

Vollero continued to state falsely to market paricipants that Touradji Capital had breached its

agreement with Amaranth and had trded improperly. These sttements were false, were made

as par of the Vollero Beach Funds' marketing efforts, and were designed to injur Touradji and

Touradji Capita.

COUNERCLAIS
COUN ONE
(Breach of Fiduciary Duty against Gentr Beach and Robert V ollero)
156. Touradji Capita repeats and releges each and every allegation set forth above as

though fully set fort herein.

157. As employees ofTouradji Capital, Beach and Vollero owed duties ofloyalty and

good faith to the firm, including duties to refrain from tang, disclosing or using confdential

information belonging to the firm and to treat that information with e¡¡me car and honesty for

the benefit of the firm and the Funds only. Beach and Vollero's duties to Touradji Capital also

included a duty not to tae actions diectly contrar to the interests of the firm and its investors,

and a duty not to place their own personal interests, or the interests of their famly members,

ahead of the firm or the firm's investors.

158. Beach and Vollero have violated their fiduciar obligations by, among other

thngs:

. Conspirig with Gentr Beach's father, Gar Beach, to steal

investor fuds, by misrepresenting Ga Beach's contrbution to
Playa LP, and by intentionally failng to document Beach Capital's
economic argement with Touradji Capital;

34
 · Misrepresenting the performance of Playa LP and witholding
inormation from Paul Tourdji and Touradji Capita regardig
Playa LP, thereby causing Touradji Capita to invest additional
invesor fuds in Playa LP's unsuccessfu drllng program;

· Continuing to be involved in private equity matters afer being

instrcted not to do so;

· Continuing to trade in the equity portolio afr having been

demoted to analyst;

· Wasing Touradji Capita's resources by forcing Touradji Capital

employees to work on projects advocated by family members of
Gentr Beach, including Gar Beach and Jeff Gentry, in an
improper effort to direct financial benefits to those faily
members;

· Misappropriating the confdential and trde secret inormation of

Touradji Capital, including information about Touradji Capita's
investors, and using that inormation to solicit investors on behalf
of their new fud and to disparge Tourji and Tourji Capital;
· Using the infrastrctue and resources ofTouradji Capita to sta a
competing fud, including by setting up that business durng work
hours, using relationships developed while at Touradji Capita, and
via Touradji Capital's email system;

. Remaíng at T ouradji Capita in an unethcal and covert attempt

to collect inormation for use in Beach and Vollero's lawsuit
agait the firm and to concoct a lawsuit agaínst the firm;

· Misappropriating information about Touradji Capital's tring

positions and convertng that inormation to their own use on
behalf of the V ollero Beach Funds; and

· Misrepresenting events tht occured durng their employment at

Touradji Capita, including events relating to Touraji Capital's
. acquisition ofthe metals trding book of Amaranth Advisors and
events relating to the firm's invesent in Playa LP.

159. As a direct and foreseeable result of Beach and VoIlero's breaches of their

fiduciary duties, Touradji Capita is entitled to an award of all monetary damages it has incured

and is continuing to incur to its business, reputation and goodwill, as described fuher above, in

a final amount to be determined at tral. Touradji Capital is also entitled to disgorgement of any

35
 il-gotten gaíns, all compensation paid to Beach and Vollero durng the period oftheir disloyalty,

and damages resulting from the loss of investors and investment capital caused by Beach and

VoIlero's actions. Touradji Capita is also entitled to recover for the costs of
the Amaranth

litigation that has been instituted and was improperly instigated by V ollero and Beach.

160. hi addition, Touradji Capita is entitled to injunctive relief requiring that Beach,

Vollero and the Vollero Beach Funds cease and desist from using the firm's confdential and

proprieta information, and that they retu that inormation imediately to the firm, including

by retung to Touradji Capita any and al hardware or other medium on which such

information is stored. Touradji Capital also is entitled to recover all el(penses incured, including

attorneys' fees, in recoverig this information.

COUNT TWO
(Unfair Competition against Gentry Beach,
Robert Vollero, and the Vollero Beach Funds)
161. Touradji and Touradji Capital repeat and reallege each and every allegation

contained above as though fuly set fort herein.

162. Beach and Vollero, in connection with their marketing of the Vollero Beach

Fuds, have lied about their responsibilty for maaging Touradji Capita's investments, and

have taken credit for performance data that belongs to Paul Touradji and Touradji Capital.

163. Beach, Vollero and the Vollero Beach Funds, individually and jointly, have

underten ths misappropriation in bad faith, in violation of SEC directives, and with ful

knowledge of the falsity oftheir statements and the wrongflness of their actions.

164. At all relevant times, Paul Touradji was listed in the Fund documents as the "key

man" responsible for managing the investments held by the Funds. The successfu performance

numbers for the Funds, including the trading books that Beach and V ollero claim to have

36
managed on their own, are the result of Paul Touradji and Touradji Capita's labor, skill and

resources.

165. Beach, Vollero and the Vollero Beach Funds' representations about theirroles are

intended to mislead, and have misled, investors into thng that Beach and V ollero are

responsible for the successfu performance ofTouradji Capital's investments.

166. In reliance on these representations, investors have invested capita in the V ollero

Beach Funds, thus resulting in unjust enrchment to Beach, V ollero and the V ollero Beach

Funds.

167. hi addition, Beach and V ollero have taen and used for their own devices the

confdential and proprieta information of Touradji Capita, including detaíled information

about the firm's investors, trading positions, and the strctue of its trading portfolios, as well as

research compiled by Tourji Capita. Beach and Vollero have used this information to solicit

and reeive investments from present or potential investors ofTouradji Capita. Beach, Vollero

and the V ollero Beach Funds have also used this confidential inormation as par of their

campaígn to disparge Touradji Capital and its investent pratices, including by falsely and

with malice statig to these curent and potential investors that Tourji Capital breached a

contrct with Beach and V ollero and engaged in improper conduct in connection with the

purchase of Amaranth Advisors' metas trading book. Touradji Capital was damaged as a result

of this dispargement when investors withdrew thei capita from the Funds, or refraíned from

investing additional capital in the Funds, as a result of these staements.

168. As a dirct and foreseeable result of Beach and Vollero's unair competition,

Touradji Capital is entitled to an award of all monetar damages it has incurred and is continuing

to incur to its business, reputation and goodwill, as described fuer above, in a final amount to

37
 be determined at triaL. Touradji Capital is fuer entitled to disgorgement of any il-gotten

gaíns, and damges resulting from the loss ofinvestors and investment capital caused by Beach

and V ollero' s actions.

169. Touradji Capital is also entitled to an.injunction directing Beach, Vollero and the

V ollero Beach Funds to discontinue their unaír competition and misuse of confidential and

proprieta data belonging to Touradji Capital.

COUN THRE
(Theft of Trade Secrets against Gentr Beach,
Robert V ollero, and the V ollero Beach Funds)

170. Touradji and Touradji Capital repeat and reallege each and every allegation

contaed above as though fuly set forth herein.

171. As employees of Touradji Capital for over thee year, Beach and Vollero

obtained access to a wealth of confdential and proprietar inormation belonging to Touradji

and Touradji Capita, including information rising to the level of trde secrets.

172. Specificaly, during their employment Beach and V ollero obtaíed confdential

inormation about Touradji Capital's investrs, including the identity of

those investors, the

identity of the investor's intern contact person, and detaíls regarding the investor's investment

preferences. Ths information is a closely guarded trade secret, in that (i) the identity and other

inormation concernng the investors is not known by others outside the firm; (ii) Tourdji

Capita takes steps to maíntaín the confdentiality ofthis information; (iii) competitors of

Tourdji Capita would find the inormation valuable; (iv) significant time and effort was spent

developing Touradji Capita's investor base and the corresponding investor database; and (v) the

information could not be easily reproduced or duplicated by others.

173. Beach and V ollero also took substantial electrnic and hard copy financial,

trading and research information when they left Touradji CapitaL. That inormation included

38
 confdential data reflecting Touradji Capital's trading strategies and the composition of its

trading portolios. Ths constitutes proprietay and confdential information, and also constitutes

a trade secret.

174. On information and belief, Beach and Vollero have used ths inormation to trade

on behalf of their new fuds.

175. The foregoing inormation was unown to Beach and Vollero prior to their

employment by Touradji Capita, and was acquird by them solely in their role as trste

employees of the firm under obligations of confdentiality.

176. Beach and VOiiero, principals of the Vollero Beach Fuds, have used Touradji

Capita's confidential investor information to solicit Touradji Capital investors on behalf of the

V ollero Beach Funds. On information and belief, certaín of these investors have invested in the

V oUero Beach Funds.

177. Touradji and Touradji Capita are entitled to an award of all moneta damages

they have incured and are continuing to incur to their business as a result of such conduct,

including all e¡¡enses incured in recovering the confdential information, as well as

disgorgement of any il-gottn gains received by Beach, V oUero, and V oUero Beach Funds.

178. Touradji and Tourdji Capita also are entitled to an injunction requirg tht

Beah, V ollero and the V ollero Beach Funds ret of all of their trade secret inormation and

cease from using that information in the future.

COUNT FOUR
(Conversion against Gentry Beach,
Robert Vollero, and the Vollero Beaeh Funds)
i 79. Touradji and Touradji Capita repeat and reallege each and every allegation

contaíned above as though fully set forth herein.

39
 180. As set forth above, Beach, Vollero, and the Vollero Beach Funds took

confidential fiancial and trading data belonging to Touradji Capital.

181. Beach, Vollero and the Vollero Beach Funds' contiued possession ofthat

information is unauthorized, and Touradji Capital possesses a superior possessory right to that

information.

182. Beach and Vollero have refused to return that inormation despite demands that it

do so.

183. Touradji and Touradji Capital ar entitled to an award of all monetar damages
they have incured and are contiuing to incur to their business as a result of such conduct,

including all el(penses incured in recovering the confdential inormation, as well as

digorgement of any il-gotten gaí received by Beach, V ollero, and V ollero Beach Funds based

upon that information.

184. Touradji and Touradji Capital are also entitled to an injunction requirg that

v onero and Beach return of all oftheir trade secret information and cease from using that

information in the futue.

COUNT FIVE
(Defamation against Gentry Beach, Robert Vollero,
the Vonero Beach Funds, and Gary Beach)
185. Tourji and Touradji Capital repeat and reallege each and every allegation

contained above as though fuly set fort herein.

186. Beach and Vollero committed defamation by stating to Ga Beach, with

knowledge tht he would repeat it, and to investors and potential investors in the V onero Beach

Funds, among others, that Touradji Capital's agreement with Amaranth had a "no trade"

provision, that Touradji and Touradji Capital violated tht "no trade" provision, and that

Touradji and Touradji Capital used the information they acquired from Amaranth Advisors to

40
 trade agaist Amarth's positions. On information and belief, Gar Beach repeated these

statements to Amarth with knowledge of their falsity.

187. Gentr Beach and Robert V ollero have also stated to Tourdji Capital investors,
I
!
and other businesses in the financial industr, that Touradji Capital "broke its word" and

breached a supposed contract with them.

¡
188. Beach and V ollero made these false statements verbally thoughout 2009 in

meetigs with potential investors in the Beach V ollero Parership.

189. These statements by the Beaches and Vollero were knowingly fale and made

with malice.

190. As a result of the fase statements by Beach and Vollero, Touradji Capita has

been forced to el(pend tie and money defending itself against clais brought by Amaranth

Advisors. hi addition, investors have withdrawn capital from the Funds, or have refraíed from

investing additional amounts in the Funds, as a result of these false statements.

191. hi addition, the statements by Beach and Vollero impugn Touradji and Touradji

Capital in their business and accuse them of unawfl activity, and are therefore defamation per
se.

192. As a direct and foreseeable result of the defamation by Beach and V ollero,

Touradji and Tourdji Capita are entitled to an award of all monetar daages they have

incurd and are continuing to incur to their business as a result of such conduct, as well as

disgorgement of any il-gott gaí received by Beach, V ollero, and the V ollero Beach Funds

resulting from these statements.

41
 COUNT SIX
(Tortous Intenerence With Business Relationships against
Gentry Beach, Rohert Vollero and the Vollero Beach Funds)
193. Tourdji and Touradji Capita repeat and reallege each and every allegation

contaned above as though fuly set fort herein.

194. Beach and Vollero tortiously interfered with Touradji Capital's relationships with

its curent and prospective investors by stating to investors and potential investors in the Vollero

Beach Funds, arong others, that Touradji Capita's agreement with Amaranth had a "no trade"

provision, that Tourdji and Touradji Capital violated that "no trade" provision, and that

Touradji and Touradji Capita used the information they acquired from Amaranth Advisors to

trade againt Amaranth's positions.

195. Gentr Beach and Robert Vollero have also stated to Touradji Capital investors,

and other businesses in the financial industr, that Tourdji Capita "broke its word" and

breached a supposed contract with them.

196. Beach and V ollero made these false statements verbally thoughout 2009 in

meetings with potential investors in the Beach V ollero Parership. Beach and V ollero made

these statements to the investors knowing that they were investors in the Funds managed by

Touradji CapitaL.

197. These statements by Beach and Vollero were knowingly false.

198. As a result of the false statements by Beach and Vollero, investors have

withdrawn capital from the Fuds, or have refraíed from investing additional amounts in the

Funds.

199. As a direct and foreseeable result of the tortous interference by Beach and

V ollero, Touradji and Touradji Capital are entitled to an award of all monetar darages they

have incured and are continuing to incur to their business as a result of such conduct, as well as

42
 disgorgement of any il-gotten gain received by Beach, V oJlero, and the V olIero Beach Funds

resultig from ths conduct.

COUNT SEVEN
(Aiding and Abettg Breach of Fiduciary Duty Against
Gentry Beach, Robert Vollero and Gary Beach)
200. Touradji and Tourji Capital repeat and reallege each and every alIegation

contained above as though fuly set forth herein.

201. Gentr Beach, Robert Vollero, and Gar Beach, with knowledge, substatially

assisted the breaches of fiduciar duty described above.

202. Ths conduct has daaged Tourdji Capital, including by the depletion of the

value of the investment in Playa LP and by loss of investors and investment capita.

COUNT EIGHT
(Declaratory Judgment against Gentr Beach,
Robert Vollero, and the Vollero Beach Funds)
203. Tourdji and Tourdji Capital repeat and relege each and every allegation

contaíed above as though fully set forth herein.

204. Touradji and Touradji Capital are entitled to a declaration that Beach and V ollero

are not entitled to recover any compensation or alleged bonuses and did not have a contract in

which they were entitled to any defined bonus amount, that V ollero, Gentr Beach, and the

V ollero Beach Funds have breached their fiduciar duties, aíded and abetted violations of

fiduciary duties, and engaged in unfair competition, theft of trade secrets, conversion and

defamation, and that Ga Beach aíded and abettd a breach of fiduciar duty.

43
 ANSWER
hi addition to the foregoing averments, Defendants Touradji Capita and Touradji Answer

the specific allegations in Beach and Vollero's First Amended Complaint as follows, each

response below corresponding to the paragraphs in the Amended Complaít:

i. Lack suffcient inormation to admt or deny.

2. Lack sufcient information to admt or deny.

3. Admit, el(cept deny Plaitiffs' chacterization of the business ofTouradji Capital

as vague.

4. Admt, el(cept deny that Paul Touradji, in his personal capacity, is the "Maaging

Parer" or "controllng General Parer" ofTouradji CapitaL.

5. Deny.

6. Deny that Plaíntiffs ar entitled to any recovery whatsoever, including for the

coures of action and amounts stated in the Amended Complaínt.

7. Lack suffcient information to admt or deny, el(cept deny that Beach acted as a

portolio manger at Solstice and that he focused on the commodity sector thoughout his career.

8. Lack sufcient inormation to admit or deny, el(cept deny that Vollero was a

portolio manager at Solstice and that V ollero has focused on the commodity sector throughout

his caeer.

9. Admit that Touradji formed Touradji Capita in approl(imately Januar 2005, and

tht in the spring of2005, Tourdji Capital hired Beach, Vollero and certaín other former

employees of Solstice Equity Management to work for Touradji CapitaL. Deny the remainder of

this paragrph as stated.

44
 10. Admit that Touradji Capital hied Beach and Vollero as at-wil employees in

appro¡¡mately May 2005, but deny that the pares entered into the stated agreement governg

the term and conditions of Beach and V ollero' s employment, el(cept as otherwse stated below:

a. Admt that it was anticipated that Beach and Vollero would assist in

managing a pool ofTouradji Global Resoures Fund capital in the oil and

gas sector, and that ths became known internlly as the Touradji OG

Book. Deny the remaínder of this pargraph as stated.

b. Admit.

c. Deny.

d. Admit that it was anticipated that Beach and V ollero would assist in

managing a yet-o-be created relative value energy equity fud. Deny the

remainder of ths paragraph as stated.

e. Deny.

f. Deny.
1 i. Deny.

12. Deny.

13. Deny.

14. . Deny.

15. Deny.

16. Admit that Touradji Capital paíd Beach and V ollero a bonus for their serces in

2005, bringing their total compensation for the year to approl(imately $2.52 milion. Deny the

remainder of ths paragraph as stated.

17. Deny.

45
 18. Deny.

19. Deny.

20. Admt that a cert porton of Beach's and Vollero's cah bonus was defered for

eighteen months. Deny the remainder of ths paragrph as stated.

21. Lack sufcient information to admit or deny the first sentence. Deny the

remaínder, el(cept admit tht, in response to a request made by V ollero tht he claímed was in

connection with an effort to purchase an aparent, Touradji Capital provided Vollero with a

letter. Defendats refer to tht letter for a full and accurate statement of its contents.

22. Deny, el(cept adit that, in response to a request made by Beach that he claímed

wa in connection with an effort to purchase an aparment, Touradji Capita provided Beach with

a reference letter in connection with his stated desir to purchase an aparent. Defendants refer

the Cour to that lettr for a ful and accuate statement of its contents.

23. Deny.

24. Deny.

25. Admit, el(cept deny any implication that Beach and Vollero contrbuted in any

signficant way to the development of this investor base.

26. Deny, el(cept admit that DeepRock did not show a profit, and in fact showed a

loss (measured in terms of overall P&L), in 2006.

27. Deny.

28. Deny.

29. Deny.

30. Deny.

46
 31. Admit that Touradji Capita paíd Beach and Vollero each a bonus of$l milion

for 2006, briging tota compensation for each of them for 2006 to $1.2 milion. Deny the

remainder of ths paragraph as stated.

32. Admt.

33. Admt that withn the Touradji Diverified Fund, certain capita was allocated

internally to what became known as the OG Diversified Book and the ST Diversified Book.

34. Deny.

35. Deny.

36. Deny.

37. Admit that in or about November 2007, Touradji Capital paid Beach and V ollero

each $282,079.29 ($453,503.68 less ta withholding) as payment of the balance of their 2005

defered compensation. Deny the remainder of this paragraph.

38. Deny.

39. Admit that 2007 was a successfu year for Touradji Capita, but that ths success

occured despite Beach and V ollero' s performance and not as a result of it. Deny the remaíder

of ths paragraph as stated.

40. Deny.

41. Deny.

42. Deny.

43. Deny.

44. Deny.

45. Deny.

46. Deny.

47
 47. Deny, el(cept admit that Plaitiffs were paid no bonus for 2007.

48. Deny.

49. Admit that Touradji Capital paíd Vollero $300,000 in April 2008. Lack suffcient

inormation to admt or deny the amount ofVollero's tal bil. Deny the remainder of ths
pargraph as stated.

50. Deny.

5!. Deny.

52. Admit that Beach apologized to his coworkers for his poor perormance in

helping to manage the Funds' investments. Deny the remaider of ths pargraph.

53. Deny.

54. Deny.

55. Deny.

56. Deny.

57. Deny.

58. Deny.

59. Deny.

60. Deny.

6!. Deny.

62. Deny.

63. Deny.

64. Deny.

65. Deny.

66. Deny.

48
 67. Deny.

68. Admt tht Beach gave letters to Tom Dwan describing Beach's version ofthe

events of September 5 and September 25, 2008, but deny that the events occured as described

69. Lack suffcient information to admit or deny whether Beach filed a police report

but deny tht Touradji made the theats descnbed in ths pargraph.

70. Deny.

71. Deny.

72. Deny.

73. Deny.

74. Deny.

75. Deny.

76. Deny.

77. Deny.

78. Deny.

79. Deny.

80. Deny.

81. Deny.

82. Admt that Vollero asisted in manging certaín Touradji Capital trding books

and invesents, and that 2008 was a volatile and diffcult year. Deny the remaíder of
ths
paragraph as stated.

83. Deny.

84. Deny the first and second sentences of ths paragraph, admit the thd.

85. Deny.

49
.:

;
FIRST CAUSE OF ACTION
(Breach of Contract)
86. Defendants incorporate their previous responses to paragraphs I though 85.

87. Deny.

88. Deny.

89. Deny.

SECOND CAUSE OF ACTION

(Violation of the New York Labor Law)
90. No response is required.
91. No response is required.

92. No response is required.

93 . No response is required.

94. No response is required.

THI CAUSE OF ACTION

(Unjust Enrichment)
95. No response is requird.

96. No response is required

97. No response is required.

98. No response is requied.

99. No response is required.

FOURTH CAUSE OF ACTION

(Quantum Meruit)
100. No response is required.

lOI. No response is required:

102. No response is required.

50
 FIFH CAUSE OF ACTION
(Intentional Inflction of Emotional Diitress)

103. Defendants incorporate their previous responses to paragraphs 1 though 85.

104. Deny.

105. Deny

SIXTH CAUSE OF ACTION

(Imposition of Constructive Trust)
106. No response is required

107. No response is required.

108. No response is required.

109. No response is required.

110. No response is required.

11 i. No response is required.

AFFIRATIV DEFENSES
FIRST AFFIRMTIVE DEFENSE
163. The Complaint fails to stae a clai for which relief ca be granted.

SECOND AFFIRTIVE DEFENSE

164. Plaintiffs' claíms ar bared by the statute of frauds.

TH AFFIRTIVE DEFENSE
165. Plaintiffs' claíms ar bared on the ground that Plaintiffs are faithess fiduciaries.

FOURTH AFFIRMTIVE DEFENSE

166. Plaítiffs' claíms are bared by their own material breach of contract.

FIFTH AFFIRTIVE DEFENSE

167. Plaíntiffs' clais are bared as a result of Plaintiffs' unclean hands.

51
 PRAYER FOR RELIEF

WHREFORE, Tourdji Capita and Touradji pray tht judgment be enterd in their
favor and against Gentry Beach and Robert V ollero, the V ollero Beach Funds as follows:

(i) Granting Beach and V ollero nothng on their claims and dismissing their claims in
their entirety;

(ii) Granting judgment in Touradji Capital and Tourdji's favor on their

counterclaíms and cross-claíms and awarding them no less $250 milion in
damages;

(iii) Enjoing and restrnig the Defendants and each of them from representing
directly or by implication that they were more than subordinate managers of
investments while employed at Touradji Capita or that they had more than
secondar credtfor the success of Touradji Capital-managed fuds during the
period of their employment;

(iv) Awarding Touradji Capita and Touradji damages for the business lost by
Plaíntiffs as a result of Beach and Vollero's tortious misconduct;

(v) Awarding Touradji Capital the reasonable costs and disbursements of this action;

(vi) Awarding Touradji Capita any other relief tht this Cour deems just and proper;
and

(vii) Awarng Tourji Capital and Touradji all ofits attorneys' fees incured in the
defense and prosecution of the present claíms.

Dated: New York, New York

November 4, 2009 PLAN RICE LLP

Sean O'Brien, Esq.

Elizabeth A. Fitzater, Esq.
Sar A. Welch, Esq.
590 Madison Avenue, 35th Floor
New York, New York 10022
Tel: (212) 333-0200
Fa¡: (212) 333-2350

Attorneys for Deftndants ami Counterclaim

Plaintif Touradji Capital Management, LP
and Paul Touradji and Counterclaim
Plaintif DeepRock Ventue Partners, LP

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