Case 1:20-cv-01984-JKB Document 104-2 Filed 06/12/23 Page 1 of 6
`Case 1:20-cv-01984-JKB Document 104-2 Filed 06/12/23 Page 1 of 6
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`EXHIBIT 1
`EXHIBIT 1
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`Case 1:20-cv-01984-JKB Document 104-2 Filed 06/12/23 Page 1 of 6
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`EXHIBIT 1
`EXHIBIT 1
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`Case 1:20-cv-01984-JKB Document 104-2 Filed 06/12/23 Page 2 of 6
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`Page 1
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` UNITED STATES DISTRICT COURT
` FOR THE DISTRICT OF MARYLAND
`
` -----------------------------------x
` In Re
` MedStar ERISA Litigation
` C.A. No.
` RDB-20-1984
` -----------------------------------x
`
` REMOTE VIDEOTAPED DEPOSITION OF
` GERALD BUETOW, Ph.D.
` Irmo, South Carolina
`
` Reporter: MaryJo O'Connor, RDR, RMR
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`Case 1:20-cv-01984-JKB Document 104-2 Filed 06/12/23 Page 3 of 6
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`Page 42
` had superior performance subsequent to that as
` well.
` It was a two-part request. One
` was to identify using only information at the
` decision date. And the other was clearly we
` wanted to see do any of those suitable
` alternatives generate -- also generate damages.
` Q. So let me say it back to make sure
` I got it. So step one was you identified what
` you believed to be suitable alternatives.
` And then step two, you sought to
` identify among those suitable alternatives
` which one -- which of those generated damages.
` Is that fair?
` MR. ZIPPERIAN: Objection to the
` form of the question.
` A. I think so. I'm sorry.
` MR. ZIPPERIAN: No, go ahead.
` A. It's a simul- -- it's a
` simultaneous calculation. One using, you know,
` the fiduciary framework, you simultaneously
` analyze the subsequent performance relative to
` the challenged fund in determining which ones
` fulfill the fiduciary framework. And then also
` you can -- and, again, there is no uniqueness
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`Case 1:20-cv-01984-JKB Document 104-2 Filed 06/12/23 Page 4 of 6
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`Page 43
` here. Several of which would have generated
` significant damages.
` Q. Did you identify any suitable
` funds that did not generate damages?
` A. I wasn't tasked to identify
` inferior funds clearly. That wasn't part of
` the request.
` Q. So if it didn't -- if a fund
` didn't result in damages, you're calling that
` inferior? Did I hear that right?
` A. Well, negative damages is clearly
` is not the objective of the task I was asked to
` run. So I didn't spend any time looking at
` inferior funds or funds that didn't perform
` better than the challenged fund. That would
` have been a, you know, complete waste of time.
` Q. I'm not trying to quarrel with
` you, Dr. Buetow. I'm just trying to understand
` what you mean by an "inferior fund."
` A. Scratch the word "inferior." What
` I meant to say is I was tasked to identify
` superior suitable alternatives which also
` subsequently outperformed the challenged fund.
` Q. So your assignment was to identify
` replacement funds that generated positive
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`Case 1:20-cv-01984-JKB Document 104-2 Filed 06/12/23 Page 5 of 6
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`Page 64
` you consider only funds in the same Morningstar
` category?
` A. Well, again, you know, the
` alternative approach has I think become very
` difficult to explain and to present. And,
` again, from experience, I think there are
` several criteria that one would look at to
` determine capitalization and style, and so
` forth. And the issue is, particularly with
` style, is it's fairly arbitrary in determining
` what fund falls into what style box.
` And there is considerable
` discussion in academic literature and
` practitioner literature as to what those
` definitions should be. In some approaches they
` actually split funds between cells. So they
` have parts of the stock and/or sometimes a fund
` can be in two cells at the same time. And so
` there are some weaknesses in it.
` But, again, the idea from our
` perspective, from my perspective, is to use an
` outsourced entity that's respected and used
` throughout the industry in order to try to get
` around all those interpretations. I have my
` own. I'm not sure that I would rely
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`Case 1:20-cv-01984-JKB Document 104-2 Filed 06/12/23 Page 6 of 6
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`Page 65
` exclusively on Morningstar in an effort to
` determine whether a fund is of a particular
` style. If you understand the fundamentals and
` the characteristics of the style, they're not
` terribly different.
` So the Morningstar, again, it's an
` effort to say: Look, this is the
` well-respected and accepted approach that a
` fiduciary would use, and so we'll start with
` that. And the universes are not static through
` time, but all you have is the current universe.
` And so some funds, you know, funds move. They
` change the characteristics or the definition
` changes or the criteria changes. So there is
` uncontrollable things that happen in a sample
` that as a fiduciary you just have to accept it
` as part of the process.
` Q. And you using Morningstar
` categories, was that an effort to make sure
` that you're comparing funds that have similar
` investment strategies?
` A. Again, it's just an outsourced
` categorization to say this is a logical first
` start, a first stop for fiduciaries to deploy.
` Again, the differences between the
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`Veritext Legal Solutions
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`www.veritext.com
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