       5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
            3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

    (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                )LOH 1DPH DS




81,7('67$7(6&28572)$33($/6
              )257+(6,;7+&,5&8,7
                BBBBBBBBBBBBBBBBB


 81,7(' 67$7(6 2) $0(5,&$       ;
           3ODLQWLII$SSHOOHH    
                                  
                                     1R
           Y                     
                                   !
                                  
 521$/' '835((                   
         'HIHQGDQW$SSHOODQW 
                                 1
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
  IRUWKH:HVWHUQ'LVWULFWRI0LFKLJDQDW*UDQG5DSLGV
     1Rn*RUGRQs4XLVW'LVWULFWsXGJH
               $UJXHG'HFHPEHU
           'HFLGHGDQG)LOHG0DUFK
   %HIRUH.583$16.<6,/(5DQG&2/(&LUFXLW
                    sXGJHV
                  BBBBBBBBBBBBBBBBB
                       &2816(/
$5*8('$QWKRQ\&*UHHQH*UDQG5DSLGV0LFKLJDQIRU
$SSHOODQWsRDQ(0H\HU$66,67$1781,7('67$7(6
$77251(< *UDQG 5DSLGV 0LFKLJDQ IRU $SSHOOHH
21%5,()$QWKRQ\&*UHHQH*UDQG5DSLGV0LFKLJDQ
IRU $SSHOODQW  sRDQ ( 0H\HU $66,67$17 81,7('
67$7(6 $77251(< *UDQG 5DSLGV 0LFKLJDQ IRU
$SSHOOHH

                            
     8QLWHG6WDWHVY'XSUHH                         1R       1R                               8QLWHG6WDWHVY'XSUHH          

                      BBBBBBBBBBBBBBBBB                                 DQGWKHSDUWLHVKDYHQRWFDOOHGLWWRWKHFRXUWjVDWWHQWLRQWKDW
                                                                        KH ZDV UHSULPDQGHG IRU WKLV LQ DQ\ ZD\  0RUHRYHU +XQW
                          23,1,21                                       WHVWLILHGWKDWVKHUHFRPPHQGHG'XSUHHLQSDUWIRUKLVYLGHR
                      BBBBBBBBBBBBBBBBB                                 H[SHUWLVH ZKLOH KH DSSDUHQWO\ GLG QRW FKDQJH WKH
                                                                        FRQILJXUDWLRQRIUHFRUGHUVWKDWGD\LQWKHFRQWUROURRP+XQW
   6,/(5&LUFXLWsXGJH'HIHQGDQW5RQDOG'XSUHHDSSHDOV               UHDIILUPHG KHU WHVWLPRQ\ WKDW WKH GLUHFWLRQ RI DW OHDVW RQH
KLV FRQYLFWLRQ DQG VHQWHQFH IRU UDFNHWHHULQJ FRQVSLUDF\          FDPHUD KDG EHHQ FKDQJHG  ,QGHHG 'XSUHHjV JUHDWHU
DUPHGUREEHU\DQGXQODZIXOSRVVHVVLRQDQGXVHRIDILUHDUP             IOH[LELOLW\ LQ KLV MRE LV HYLGHQFHG E\ WKH LQGLFDWLRQ LQ WKH
LQWKHFRPPLVVLRQRIDFULPHRIYLROHQFH+HZDVVHQWHQFHG             JRYHUQPHQWjVEULHIWKDWKHPD\QRWHYHQKDYHEHHQVFKHGXOHG
WRPRQWKVRQWKHILUVWWZRFKDUJHVDQGPRQWKVRQWKH              WRZRUNWKHGD\RIWKHUREEHU\EXWFDPHLQDQ\ZD\7KH
WKLUGWRUXQFRQVHFXWLYHO\WRWKHSUHYLRXVVHQWHQFH$VVHW           OHYHORIGLVFUHWLRQ'XSUHHHQMR\HGLQKLVMREDVHYLGHQFHGE\
IRUWKEHORZZHDIILUPWKHGHFLVLRQRIWKHGLVWULFWFRXUW              WKHQDWXUHRIKLVMREIXQFWLRQVWKHH[SHUWLVHKHSRVVHVVHGDQG
                                                                        KLVLQYROYHPHQWLQWKHLQYHVWLJDWLRQRIWKHUREEHU\LQGLFDWH
                       %$&.*5281'                                       WKDWWKHGLVWULFWFRXUWGLGQRWHUULQDSSO\LQJWKLVHQKDQFHPHQW
  ,Q  DQ DUPHG JXDUG IRU WKH :ROYHULQH $UPRUHG               $)),50('
'LVSDWFK6HUYLFHZDVUREEHGDWJXQSRLQWZKLOHPDNLQJKLV
UHJXODU SLFNXS RI FDVK DQG FKHFNV DW WKH 9DOXH &LW\
'HSDUWPHQW6WRUHm9DOXH&LW\lLQ:\RPLQJ0LFKLJDQ$W
WKHWLPHRIWKHUREEHU\'XSUHHZDVHPSOR\HGDW9DOXH&LW\
DV D ORVV SUHYHQWLRQ RIILFHU DQG ZDV DW WKH VWRUH ZKHQ WKH
UREEHU\RFFXUUHG7ZRPHQHQWHUHGWKHVWRUHVKRUWO\DIWHUWKH
DUPRUHG WUXFN JXDUG 6WHYHQ 6KRRN DUULYHG DQG IROORZHG
KLPWRWKHEDFNRIWKHVWRUH6KRRNKDGMXVWWDNHQGHOLYHU\RI
WZREDJVRIPRQH\RQHFRQWDLQLQJDQGWKHRWKHU
FRQWDLQLQJDQGSODFHGWKHEDJVLQWRRQHFDQYDV
EDJZKHQKHZDVFRQIURQWHGE\%ULDQ7XIQHOO7XIQHOOKHOG
DJXQWR6KRRNjVFKHVWKLVDFFRPSOLFH5HJLQDOG&ORSWRQ
WRRNWKHFDQYDVEDJDQGWKHWZRUDQRXWRIWKHVWRUH7XIQHOO
DQG&ORSWRQZHUHXOWLPDWHO\DUUHVWHG7XIQHOOSOHGJXLOW\WR
UDFNHWHHULQJFRQVSLUDF\DUPHGUREEHU\DQGEHLQJDIHORQLQ
SRVVHVVLRQ RI D ILUHDUP DQG UHFHLYHG D VHQWHQFH RI 
PRQWKV&ORSWRQSOHGJXLOW\WRUDFNHWHHULQJFRQVSLUDF\DQG
DUPHGUREEHU\DQGZDVVHQWHQFHGWRPRQWKV
  'XSUHHZDVLQGLFWHGRQFKDUJHVRIUDFNHWHHULQJFRQVSLUDF\
DUPHGUREEHU\DQGXQODZIXOSRVVHVVLRQDQGXVHRIDILUHDUP
LQ WKH FRPPLVVLRQ RI D FULPH RI YLROHQFH  $W WULDO ERWK
7XIQHOO DQG &ORSWRQ WHVWLILHG WKDW 'XSUHH KHOSHG SODQ WKH           
UREEHU\ XVLQJ NQRZOHGJH JDLQHG DV 9DOXH &LW\jV ORVV                    7KH WHVWLPRQ\ ZDV WKDW HPSOR\HHV VXFK DV 'XSUHH ZHUH VXSSRVHG
                                                                        WR mFORFN LQl DV LQ   +RVNLQV    EXW WKDW 'XSUHH GLG QRW GR VR WKH GD\ RI WKH
SUHYHQWLRQRIILFHUDQGIURPIRUPHUHPSOR\PHQWDVDJXDUGIRU            UREEHU\ DQG QHYHU DVNHG WR EH SDLG IRU ZRUN WKDW GD\
    8QLWHG6WDWHVY'XSUHH                       1R      1R                        8QLWHG6WDWHVY'XSUHH          

WR DQDO\]H ZKHWKHU KLV SRVLWLRQ ZDV FKDUDFWHUL]HG E\ WKH     DQDUPRUHGWUXFNVHUYLFHDQGWKDWKHVXSSOLHGWKHJXQXVHG
UHTXLVLWH PDQDJHULDO RU SURIHVVLRQDO GLVFUHWLRQ FRQFOXGLQJ     LQLWVFRPPLVVLRQ'XSUHHZDVFRQYLFWHGRIDOOFKDUJHVDQG
WKDWLWZDVQRW                                                     ZDVVHQWHQFHGWRDWRWDORIPRQWKV
  +HZDVVXEMHFWWRVXSHUYLVLRQDQGKLVGXWLHVDVDVHFXULW\                           67$1'$5'2)5(9,(:
  JXDUG ZHUH TXLWH FLUFXPVFULEHG  +RVNLQVjV SULPDU\
  UHVSRQVLELOLW\ZDVVLPSO\WRPRQLWRUYLGHRVXUYHLOODQFH               7RWKHH[WHQW'XSUHHPDNHVDFRQVWLWXWLRQDOFKDOOHQJHWR
  RIWKHVWRUHDQGWRFDOOLQWKHFDVHRIDQ\VXVSLFLRXV         KLVFRQYLFWLRQXQGHUWKH+REEV$FWWKLVLVVXHLVYLHZHGDVD
  DFWLYLW\$QDGGLWLRQDOUHVSRQVLELOLW\ZDVWRORRNIRUDQG        TXHVWLRQRIODZDQGLVUHYLHZHGGHQRYR6HH8QLWHG6WDWHV
  UHFWLI\ PLQRU VDIHW\ SUREOHPV  1RWKLQJ LQ WKH UHFRUG      Y6PLWK)GWK&LU7RWKHH[WHQWKH
  VXJJHVWV WKDW KH HQMR\HG DQ\ VRUW RI PHDQLQJIXO             DUJXHV WKDW WKH HYLGHQFH ZDV LQVXIILFLHQW WR VXSSRUW WKLV
  GLVFUHWLRQLQFDUU\LQJRXWWKRVHUHVSRQVLELOLWLHV,WZDV     FRQYLFWLRQ WKLV FRXUW PXVW GHWHUPLQH mZKHWKHU DIWHU
  QRWGLIILFXOWIRU.0DUWjVPDQDJHPHQWWRREMHFWLYHO\DQG           UHYLHZLQJ WKH HYLGHQFH LQ WKH OLJKW PRVW IDYRUDEOH WR WKH
  H[SHGLHQWO\GHWHUPLQH+RVNLQVjVKRQHVW\RUREVHUYHKLV             SURVHFXWLRQDQ\UDWLRQDOWULHURIIDFWFRXOGKDYHIRXQGWKH
  ZKHUHDERXWV$TXLFNFKHFNRIWKHVHFXULW\ERRWKZDVDOO          HVVHQWLDOHOHPHQWVRIWKHFULPHEH\RQGDUHDVRQDEOHGRXEWl
  WKDWZDVUHTXLUHGWRVHHLI+RVNLQVZDVRQGXW\+RVNLQV          8QLWHG 6WDWHV Y :DQJ  )G   WK &LU 
  ZDVVXSSRVHGWREHVLWWLQJLQWKHVHFXULW\URRPZDWFKLQJ           LQWHUQDOTXRWDWLRQPDUNVRPLWWHGHPSKDVLVLQRULJLQDO,Q
  VHFXULW\PRQLWRUVEHWZHHQDQGDP+HZDV               UHYLHZLQJ WKH GHQLDO RI 'XSUHHjV PRWLRQ WR VXSSUHVV WKLV
  UHTXLUHG WR FORFNLQ  ,QGHHG +RVNLQVjV VXSHUYLVRU          FRXUWXSKROGVWKHGLVWULFWFRXUWjVILQGLQJVRIIDFWXQOHVVWKH\
  ZDUQHG +RVNLQV WKDW . 0DUW QHDUO\ ILUHG DQRWKHU             DUH FOHDUO\ HUURQHRXV DQG UHYLHZV LWV OHJDO FRQFOXVLRQVGH
  HPSOR\HH IRU OHDYLQJ WKH VHFXULW\ RIILFH WR XVH WKH        QRYR8QLWHG6WDWHVY$WNLQ)GWK&LU
  UHVWURRP  *HQHUDOO\ WKRVH RFFXS\LQJ SRVLWLRQV               7KHFRXUWUHYLHZVWKHWULDOFRXUWjVGHQLDORI'XSUHHjV
  FKDUDFWHUL]HG E\ SURIHVVLRQDO RU PDQDJHULDO GLVFUHWLRQ        PRWLRQIRUDQHZWULDOXQGHUDQDEXVHRIGLVFUHWLRQVWDQGDUG
  ZRXOGQRWEHVXEMHFWHGWRVXFKKDUVKFRQVHTXHQFHVIRU              8QLWHG6WDWHVY*DLWDQ$FHYHGR)GWK&LU
  WDNLQJDEDWKURRPEUHDN                                           $OWKRXJK'XSUHHDVVHUWVZLWKRXWDXWKRULW\WKDWWKLV
  ,QVKRUW+RVNLQVZDVDQRUGLQDU\HPSOR\HHZKRKDGQR              FRXUWVKRXOGUHYLHZKLVFODLPRISURVHFXWRULDOYLQGLFWLYHQHVV
  PDQDJHPHQWIXQFWLRQDQGYLUWXDOO\QRGLVFUHWLRQLQWKH             GHQRYRRUGLQDULO\VXFKFODLPVDUHUHYLHZHGIRUFOHDUHUURU
  H[HUFLVHRIKLVGXWLHV+RVNLQVRIIHUHG.0DUWQRVSHFLDO         6HH8QLWHG6WDWHVY6DPPRQV)GWK&LU
  VNLOORUNQRZOHGJH7KHIDFWWKDWKHZDVDVVRFLDWHGZLWK          2IFRXUVHWKHUHLVQRORZHUFRXUWILQGLQJWRUHYLHZ
  VWRUHVHFXULW\LVLQVXIILFLHQWWRRYHUFRPHWKHDEVHQFHRI          DV'XSUHHKDVUDLVHGWKLVFODLPIRUWKHILUVWWLPHRQDSSHDO
  WKHVHNH\FULWHULD                                                )LQDOO\ ZLWK UHJDUG WR 'XSUHHjV FKDOOHQJHV WR KLV YDULRXV
                                                                     VHQWHQFHHQKDQFHPHQWVm>W@KLVFRXUWUHYLHZVDGLVWULFWFRXUWjV
,GDW                                                        DSSOLFDWLRQ RI WKH 6HQWHQFLQJ *XLGHOLQHV GH QRYR DQG WKH
                                                                     GLVWULFW FRXUWjV ILQGLQJV RI IDFW WKHUHXQGHU IRU FOHDU HUURUl
   &HUWDLQ IDFWV UHDGLO\ GLVWLQJXLVK WKLV FDVH IURP+RVNLQV   8QLWHG 6WDWHV Y &RZDQ  )G   WK &LU
)RUH[DPSOHWKHUHLVQRLQGLFDWLRQWKDW'XSUHHZDVUHTXLUHG         
WRVWD\LQRQHSDUWLFXODUSODFHIRUDQ\VHWWLPHLQVWHDGKHZDV
DEOHWRZDONDURXQGWKHVDOHVIORRUDQRUPDORFFXUUHQFHDQG
DSSDUHQWO\FRPHDQGJRLQWKHVHFXULW\URRPDVKHZLVKHG
,QGHHGKHZDVLQWKHEDWKURRPZKHQWKHUREEHU\RFFXUUHG
         8QLWHG6WDWHVY'XSUHH                               1R          1R                       8QLWHG6WDWHVY'XSUHH        

                                ',6&866,21                                           LPSRUWDQWO\WKHIDFLOLWDWLRQDUJXPHQWHPSKDVL]HVRQO\RQH
                                                                                     UHTXLVLWHHOHPHQW$VWKLVFRXUWKDVPRUHUHFHQWO\KHOG
$ +REEV$FW
                                                                                       $FFRUGLQJWRRXURZQSUHFHGHQWDQGWRWKHDSSOLFDWLRQ
  'XSUHH ZDV FRQYLFWHG RI UDFNHWHHULQJ FRQVSLUDF\ DQG                            QRWHVLQWKH6HQWHQFLQJ*XLGHOLQHVWKHPVHOYHVWKHOHYHO
DUPHGUREEHU\LQYLRODWLRQRIWKH+REEV$FWZKLFKSURYLGHV                           RIGLVFUHWLRQDFFRUGHGDQHPSOR\HHLVWREHWKHGHFLVLYH
                                                                                       IDFWRULQGHWHUPLQLQJZKHWKHUKLVSRVLWLRQZDVRQHWKDW
     :KRHYHU LQ DQ\ ZD\ RU GHJUHH REVWUXFWV GHOD\V RU                        FDQEHFKDUDFWHUL]HGDVDWUXVWSRVLWLRQ7KHFLWHGFDVHV
     DIIHFWV FRPPHUFH RU WKH PRYHPHQW RI DQ\ DUWLFOH RU                        KDYHWRRRIWHQHPSKDVL]HGZHEHOLHYHHUURQHRXVO\WKH
     FRPPRGLW\ LQ FRPPHUFH E\ UREEHU\ RU H[WRUWLRQ RU                          VXSHUYLVLRQDQHPSOR\HHUHFHLYHV7KHH[DPSOHVJLYHQ
     DWWHPSWVRUFRQVSLUHVVRWRGRRUFRPPLWVRUWKUHDWHQV                           LQ WKH DSSOLFDWLRQ QRWHV SK\VLFLDQ DWWRUQH\ DQG
     SK\VLFDOYLROHQFHWRDQ\SHUVRQRUSURSHUW\LQIXUWKHUDQFH                        ILGXFLDU\LPSO\WKDWWKHLQKHUHQWQDWXUHRIWKHZRUNLWVHOI
     RIDSODQRUSXUSRVHWRGRDQ\WKLQJLQYLRODWLRQRIWKLV                          VKRXOGQDWXUDOO\FRQYH\DVXEVWDQWLDOGHJUHHRIGLVFUHWLRQ
     VHFWLRQVKDOOEHILQHGXQGHUWKLVWLWOHRULPSULVRQHGQRW                         WRWKHGHIHQGDQWFRQFHUQLQJKRZWRSURSHUO\DGPLQLVWHU
     PRUHWKDQWZHQW\\HDUVRUERWK                                                  WKH SURSHUW\ RI DQRWKHU RU RWKHUZLVH DFW LQ WKHLU EHVW
                                                                                       LQWHUHVW
86&D7KLVmEURDGMXULVGLFWLRQDOODQJXDJHlKDV
KLVWRULFDOO\EHHQFRQVWUXHGDVUHTXLULQJRQO\ DGHPLQLPXV                          8QLWHG6WDWHVY7ULEEOH)GWK&LU
HIIHFWRQLQWHUVWDWHFRPPHUFH6HH8QLWHG6WDWHVY0LOOV
)GWK&LU'XSUHHKRZHYHUDUJXHVWKDW                          7XUQLQJWRWKHQDWXUHRI'XSUHHjVZRUNZHQRWHDIDFWXDOO\
LQOLJKWRIUHFHQWSUHFHGHQWVDEURJDWLQJWKHEURDGFRQVWUXFWLRQ                      VLPLODUFDVHIURPDQRWKHU&LUFXLW8QLWHG6WDWHVY+RVNLQV
RIWKH&RPPHUFH&ODXVHoLQFOXGLQJ8QLWHG6WDWHVY/RSH]                           )GWK&LUFHUWGHQLHG6&W
868QLWHG6WDWHVY0RUULVRQ86                         ,QWKDWFDVH+RVNLQVZKRKDGEHHQZRUNLQJDVD.
DQGsRQHVY8QLWHG6WDWHV86o                           0DUW VHFXULW\ JXDUG IRU DERXW D PRQWK KHOSHG SODQ DQG
WKH JRYHUQPHQW IDLOHG WR PHHW LWV EXUGHQ RI VKRZLQJ D                       H[HFXWHDUREEHU\RIWKHVWRUH$OWKRXJKKLVMREUHTXLUHGKLP
VXIILFLHQW HIIHFW RQ LQWHUVWDWH FRPPHUFH WR PHHW WKH                          WR VLW LQ WKH VWRUHjV VHFXULW\ URRP DQG ZDWFK WKH VHFXULW\
MXULVGLFWLRQDOSUHGLFDWHIRUKLVSURVHFXWLRQXQGHUWKH+REEV                         PRQLWRUVEHWZHHQDPDQGDPHDFKPRUQLQJRQ
$FW                                                                                 WKHPRUQLQJRIWKHUREEHU\+RVNLQVVWDWLRQHGKLPVHOIRQWKH
                                                                                     VDOHVIORRU,GDW$IWHUUHFHLYLQJDVLJQDOIURP+RVNLQV
                                                                                     WKHUREEHU*UHJJHIROORZHG+RVNLQVWRWKHFDVKURRPDQG
                                                                                    ZLWK D JXQ RUGHUHG WKH FDVK URRP DWWHQGDQW WR RSHQ WKH
       ,Q   /RSH]    WKH 6XSUHPH &RXUW IRXQG WKDW &RQJUHVVjV HQDFWPHQW RI WKH
                                                                                     mFDJHlZKHUHWKHFDVKZDVNHSWDQGWROLHGRZQRQWKHIORRU
*XQ)UHH 6FKRRO =RQHV $FW RI  H[FHHGHG WKH VFRSH RI LWV DXWKRULW\
                                                                                     QH[W WR +RVNLQV  *UHJJH KDG WKH FDVK URRP DWWHQGDQW
                                                                                     KDQGFXII KHUVHOI WR +RVNLQV DQG LQVWUXFWHG WKHP WR VWD\
XQGHU WKH &RPPHUFH &ODXVH LQ WKDW mSRVVHVVLRQ RI D JXQ LQ D ORFDO VFKRRO
]RQH LV LQ QR VHQVH DQ HFRQRPLF DFWLYLW\ WKDW PLJKW WKURXJK UHSHWLWLRQ
HOVHZKHUH VXEVWDQWLDOO\ DIIHFW DQ\ VRUW RI LQWHUVWDWH FRPPHUFHl        /RSH]      GRZQ  +H WKHQ FROOHFWHG WKH PRQH\ DQG OHIW  ,G  ,Q
 86 DW        0RUH UHFHQWO\ LQ   0RUULVRQ   WKH &RXUW LQYDOLGDWHG WKH     UHYLHZLQJWKHVHQWHQFLQJMXGJHjVLPSRVLWLRQRIWKH%
FLYLO UHPHG\ SURYLVLRQ RI WKH 9LROHQFH $JDLQVW :RPHQ $FW ILQGLQJ WKDW               HQKDQFHPHQWWKHFRXUWQRWHGWKDWWKHUHZDVQRTXHVWLRQWKDW
LW GLG QRW UHJXODWH DFWLYLW\ WKDW VXEVWDQWLDOO\ DIIHFWHG LQWHUVWDWH FRPPHUFH
     sRQHV
                                                                                     +RVNLQV KDG XVHG KLV SRVLWLRQ WR KHOS FRPPLW WKH UREEHU\
,Q            WKH &RXUW UHYHUVHG D GHIHQGDQWjV FRQYLFWLRQ XQGHU WKH IHGHUDO
DUVRQ VWDWXWH DUVRQ RI DQ RZQHURFFXSLHG SULYDWH UHVLGHQFH ZKLFK ZDV QRW
                                                                                     HYHQSOD\LQJWKHYLFWLPEXWWKDWWKLVZDVQRWWKHVDPHDV
XVHG IRU DQ\ FRPPHUFLDO SXUSRVH GLG QRW FRQVWLWXWH mFRPPHUFHDIIHFWLQJ               KDYLQJDEXVHGDSRVLWLRQRIWUXVW7KHFRXUWWKHQSURFHHGHG
DFWLYLW\l    sRQHV  86 DW 
     8QLWHG6WDWHVY'XSUHH                          1R       1R                        8QLWHG6WDWHVY'XSUHH         

&LU,Q'XHUVRQWKHHQKDQFHPHQWZDVKHOGWRDSSO\                   'XSUHHUHOLHVSULPDULO\RQ8QLWHG6WDWHVY:DQJ)G
WR D PDQDJHULDO HPSOR\HH RI WKH 8QLWHG 3DUFHO 6HUYLFH             WK&LUIRUVXSSRUW,QWKDWFDVHWKLVFRXUWKHOG
m836lZKRUREEHGD836GLVSDWFKHUDQGDUPRUHGWUXFN                    WKDW WKH UREEHU\ RI D FRXSOH LQ WKHLU KRPH GLG QRW KDYH D
FRXULHU RI PRUH WKDQ   7KH FRXUW DIILUPHG WKH           VXEVWDQWLDO HIIHFW RQ LQWHUVWDWH FRPPHUFH UHTXLULQJ WKH
GLVWULFWFRXUWjVILQGLQJWKDW'XHUVRQKDGH[SORLWHGKLVSRVLWLRQ          UHYHUVDO RI :DQJjV FRQYLFWLRQ XQGHU WKH +REEV $FW
DVDPDQDJHULQDZD\WKDWVXEVWDQWLDOO\IDFLOLWDWHGWKHFULPH          6SHFLILFDOO\ZHREVHUYHGWKDWmRXUSUHFHGHQWVKDYHLQYROYHG
E\                                                                       UREEHULHVLQZKLFKWKHYLFWLPVZHUHEXVLQHVVHVHQJDJHGLQ
                                                                          LQWHUVWDWHFRPPHUFH%XWZKHUHDVKHUHWKHFULPLQDODFWLV
  FXWWLQJ WKURXJK WKH VHFXULW\ UHVWULFWLRQV DSSOLFDEOH WR           GLUHFWHG DW D SULYDWH FLWL]HQ WKH FRQQHFWLRQ WR LQWHUVWDWH
  ORZHUOHYHO HPSOR\HHV VR WKDW KH FRXOG OHDUQ ZKHUH               FRPPHUFHLVPXFKPRUHDWWHQXDWHGl,GDW3URFHHGLQJ
  HYHU\WKLQJ ZDV ORFDWHG LQFOXGLQJ WKH GHSRVLW YDXOW              IURP:DQJ'XSUHHFKDUDFWHUL]HVWKHFULPHLQWKHLQVWDQWFDVH
  WDNLQJDGYDQWDJHRIKLVDFFHVVWRWKHNH\VWRWKHWZR              DVWKHUREEHU\RIDQLQGLYLGXDOQRWHV WKDWWKHDUPRUHGFDU
  836 YHKLFOHV XVHG LQ WKH JHWDZD\    UHYLHZLQJ WKH         VHUYLFH IRU ZKLFK WKDW LQGLYLGXDO ZRUNHG GLG QRW RSHUDWH
  WHOHSKRQH V\VWHP VR WKDW KH FRXOG GLVDEOH LW DQG         RXWVLGHRI0LFKLJDQDQGFRQWHQGVWKDWWKHJRYHUQPHQWKDV
  TXHVWLRQLQJ D 836 WUXFN PDQDJHU DERXW WKH )HGHUDO                QRWVKRZQDVXIILFLHQWLQWHUVWDWHQH[XV7KLVDUJXPHQWLVQRW
  $UPRUHGFRXULHUjVVFKHGXOH                                           SHUVXDVLYH7KHUREEHU\LQWKLVFDVHWDUJHWHGDQDUPRUHGFDU
                                                                          PHVVHQJHUHQJDJHGLQWKHSHUIRUPDQFHRIKLVGXWLHVLQVLGH
,GDW7KHFRXUWREVHUYHGWKDWm>L@WZRXOGKDYHEHHQIDU            DGHSDUWPHQWVWRUHRQKLVUHJXODUURXWH6KRRNKDGMXVWWDNHQ
PRUH GLIILFXOW IRU WKH GHIHQGDQW WR FRPPLW WKH FULPH DQG         SRVVHVVLRQ RI   LQ FDVK DQG FKHFNV o QRW DQ
PDNHJRRGKLVHVFDSHLIKHKDGQRWKHOGDSRVLWLRQRIWUXVW           LQVLJQLILFDQWVXPoZKHQKHZDVUREEHG7KLVVLWXDWLRQLV
RU KDG QRW SRVVHVVHG VSHFLDO VNLOOV LQ FRPSXWHUV DQG              FOHDUO\GLVWLQJXLVKDEOHIURPWKHUREEHU\RISULYDWHFLWL]HQVLQ
HOHFWURQLFVl,G7KHPDMRULW\RIWKHFRXUWjVGLVFXVVLRQRIWKH         WKHLUUHVLGHQFHLQ:DQJ
HQKDQFHPHQWKRZHYHUZDVGHYRWHGWRUHMHFWLQJ'XHUVRQjV
DUJXPHQWWKDWWKHYLFWLPRIWKHUREEHU\ZDVWKHDUPRUHGWUXFN                ,Q8QLWHG6WDWHVY6PLWK)GWK&LUWKLV
VHUYLFHZLWKZKRPKHKHOGQRSRVLWLRQRIWUXVWUDWKHUWKDQ              FRXUWKHOGWKDWWKHWUDGLWLRQDOGHPLQLPXVVWDQGDUGIRU+REEV
836,GDW                                                    $FWYLRODWLRQVVXUYLYHG/RSH]VRWKDWmLIDVWDWXWHUHJXODWHV
                                                                          DQDFWLYLW\ZKLFKWKURXJKUHSHWLWLRQLQ>WKH@DJJUHJDWHKDVD
   'XHUVRQ KRZHYHU SODFHV D JUHDW GHDO RI HPSKDVLV RQ           VXEVWDQWLDO HIIHFW RQ LQWHUVWDWH FRPPHUFH WKH GH PLQLPXV
IDFLOLWDWLRQRIWKHFULPHDQGLQWKDWDVSHFWLVGLVWLQJXLVKDEOH        FKDUDFWHURILQGLYLGXDOLQVWDQFHVDULVLQJXQGHUWKHVWDWXWHLVRI
LQGHJUHHIURPWKHLQVWDQWFDVH+HUH'XSUHHGLGQRWDFWXDOO\           QR FRQVHTXHQFHl  ,G DW  LQWHUQDO TXRWDWLRQ PDUNV
FRPPLWWKHUREEHU\(YHQLIKHIDFLOLWDWHGLWWKLVIDFLOLWDWLRQ         RPLWWHG:DQJUHFRJQL]HGWKLVKROGLQJEXWmVWDWHGWKDWWKH
GLGQRWULVHWRWKHOHYHORIDFWLYLW\LQ'XHUVRQ6WLOO'XSUHHjV        UHTXLUHGVKRZLQJµLVRIDGLIIHUHQWRUGHUjZKHQWKHYLFWLPLV
UHOLDQFH RQ WKH IDFW WKDW WKH FDPHUDV KH LV DOOHJHG WR KDYH    D SULYDWH FLWL]HQ UDWKHU WKDQ D EXVLQHVV HQWLW\ HQJDJHG LQ
PRYHG ZHUH QRW UHFRUGLQJ LV PLVSODFHG HYHQ ZLWKRXW                LQWHUVWDWHFRPPHUFHl8QLWHG6WDWHVY*DUFLD)6XSS
DIIHFWLQJ WKH UHFRUGLQJ WKHUH ZHUH RWKHU ZD\V 'XSUHHjV            G('0LFKTXRWLQJ:DQJ)GDW
DOOHJHG DFWLRQV FRXOG KDYH IDFLOLWDWHG WKH FULPH  0RUH           7KHLQVWDQWFDVHGRHVQRWIDOOZLWKLQWKLVH[FHSWLRQ
                                                                          $OWKRXJK WKH PRQH\ LQ WKH UREEHU\ ZDV WDNHQ IURP DQ
                                                                          DUPRUHGWUXFNJXDUGLWKDGMXVWEHHQSLFNHGXSIURPD9DOXH
                                                                        &LW\'HSDUWPHQW6WRUH9DOXH&LW\LVHQJDJHGLQLQWHUVWDWH
       6LPLODUO\ ZH VKRXOG UHMHFW VXFK LPSOLFDWLRQ E\ 'XSUHH ZKR
UHSHDWHGO\ QRWHV WKDW KH ZDV QRW DQ HPSOR\HH RI WKH DUPRUHG FDU FRPSDQ\   FRPPHUFH DQG WKH PRQH\ DOWKRXJK LQ WKH FXVWRG\ RI WKH
LQ WKLV FDVH
       8QLWHG6WDWHVY'XSUHH                              1R         1R                        8QLWHG6WDWHVY'XSUHH        

DUPRUHGWUXFNFRPSDQ\ZDVGHVWLQHGIRUDGHSRVLWRQEHKDOI                        'XSUHHFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGE\GHHPLQJKLV
RI9DOXH&LW\DQGZDVQRWWKHSURSHUW\RIWKHDUPRUHGWUXFN                      MREDmSRVLWLRQRIWUXVWl+HFLWHVWKH$SSOLFDWLRQ1RWHVWR
FRPSDQ\7KHDUPRUHGWUXFNFRPSDQ\DOVRKDGLQVXUHGWKH                          % ZKLFK SURYLGH WKDW D SRVLWLRQ RI WUXVW LV
SURFHHGVZLWKDQRXWRIVWDWHLQVXUDQFHFRPSDQ\7KHIDFWV                      mFKDUDFWHUL]HGE\SURIHVVLRQDORUPDQDJHULDOGLVFUHWLRQLH
RIWKLVFDVHGRQRWUHTXLUHmORQJFKDLQVRIFDXVDOLQIHUHQFH               VXEVWDQWLDO GLVFUHWLRQDU\ MXGJPHQW WKDW LV RUGLQDULO\ JLYHQ
WRDUULYHDWDVXEVWDQWLDOHIIHFWRQLQWHUVWDWHFRPPHUFHlQRU                   FRQVLGHUDEOH GHIHUHQFH 3HUVRQV KROGLQJ VXFK SRVLWLRQV
WKHW\SHRImµEXWWHUIO\HIIHFWjWKHRU\RIFDXVDWLRQlHVFKHZHG                    RUGLQDULO\ DUH VXEMHFW WR VLJQLILFDQWO\ OHVV VXSHUYLVLRQ WKDQ
LQ :DQJ  6HH :DQJ  )G DW   7KH JRYHUQPHQW                  HPSOR\HHV ZKRVH UHVSRQVLELOLWLHV DUH SULPDULO\ QRQ
VXIILFLHQWO\ HVWDEOLVKHG WKH MXULVGLFWLRQDO SUHGLFDWH IRU                   GLVFUHWLRQDU\ LQ QDWXUHl  7KH $SSOLFDWLRQ 1RWHV JR RQ WR
'XSUHHjVSURVHFXWLRQXQGHUWKH+REEV$FW                                        GLVWLQJXLVKIRUH[DPSOHWKHHPEH]]OHPHQWRIDFOLHQWjVIXQGV
                                                                                 E\DQDWWRUQH\VHUYLQJDVJXDUGLDQDVLWXDWLRQLQZKLFKWKH
% 0RWLRQWR6XSUHVV                                                             HQKDQFHPHQWZRXOGDSSO\IURPHPEH]]OHPHQWRUWKHIWE\DQ
                                                                                 RUGLQDU\ EDQN WHOOHU RU KRWHO FOHUN VLWXDWLRQV WR ZKLFK WKH
  'XSUHHQH[WFRQWHQGVWKDWVWDWHPHQWVKHPDGHWRWKHSROLFH                     HQKDQFHPHQWZRXOGQRWDSSO\EHFDXVHWKHVHSRVLWLRQVDUHQRW
IROORZLQJKLVDUUHVWVKRXOGQRWKDYHEHHQDGPLWWHGDWWULDO                     FKDUDFWHUL]HG E\ WKH UHTXLVLWH GLVFUHWLRQ  'XSUHH DOVR
6SHFLILFDOO\ KH FRQWHQGV WKDW KLV FRXQVHO KDG DQ LQIRUPDO               FRQWHQGV WKDW WKH UHTXLUHPHQW WKDW WKH XVH RI WKH SRVLWLRQ
DJUHHPHQWZLWKWKHJRYHUQPHQWZKHUHE\FRXQVHOZRXOGEH                          VLJQLILFDQWO\ IDFLOLWDWH HLWKHU WKH FRPPLVVLRQ RU WKH
QRWLILHGLI'XSUHHZDVWREHDUUHVWHGDQG'XSUHHZRXOGWXUQ                     FRQFHDOPHQWRIWKHRIIHQVHLVQRWPHWLQKLVFDVHEHFDXVHWKH
KLPVHOILQ:KHQKHZDVDUUHVWHGKRZHYHUKLVFRXQVHOZDV                      VWRUHVXUYHLOODQFHFDPHUDVKHLVDOOHJHGWRKDYHPRYHGZHUH
QRWQRWLILHGDQGZDVQRWSUHVHQWZKHQ'XSUHHVSRNHZLWK)%,                      QRW UHFRUGLQJ  'XSUHH DQDORJL]HV KLV FDVH WR5DJODQG 
$JHQW 5REHUWD *LOOLJDQ ZKR NQHZ KH ZDV UHSUHVHQWHG     E\               )G DW  LQ ZKLFK D EDQNjV FXVWRPHU VHUYLFH
FRXQVHO IRU DSSUR[LPDWHO\ DQ KRXU DQG D KDOI  7KRXJK                 UHSUHVHQWDWLYHZKRHQJDJHGLQDIUDXGVFKHPHE\IRUJLQJWKH
'XSUHHVLJQHGWZRZULWWHQZDLYHUVRQHZDLYLQJKLVULJKWV                        VLJQDWXUHV RI EDQN RIILFHUV DQG WDNLQJ IXQGV GHSRVLWHG E\
XQGHU0LUDQGDY$UL]RQD86DQGDQRWKHU                       FXVWRPHUVZDVKHOGQRWWRKDYHRFFXSLHGDSRVLWLRQRIWUXVW
FRXQVHOVSHFLILF ZDLYHU EHIRUH VSHDNLQJ ZLWK *LOOLJDQ KH                 IRUSXUSRVHVRIWKHHQKDQFHPHQW
FRQWHQGVWKDWWKHVHVWDWHPHQWVZHUHREWDLQHGLQYLRODWLRQRI
KLVULJKWVXQGHUWKH)LIWKDQG6L[WK$PHQGPHQWVDQGWKDW                           7KH JRYHUQPHQW KRZHYHU DFNQRZOHGJHV 5DJODQG DQG
WKHLUDGPLVVLRQIRUFHGKLPWRWHVWLI\DWWULDO                                 RWKHU SUHFHGHQWV ILQGLQJ GHIHQGDQWV QRW WR KDYH RFFXSLHG
                                                                                 SRVLWLRQVRIWUXVWEXWDWWHPSWVWRGLVWLQJXLVKWKHPE\DUJXLQJ
                                                                                 WKDW'XSUHHKDGDmILGXFLDU\OLNHlUHODWLRQVKLSZLWKWKHVWRUH
                                                                                PDUNHG E\ JUHDW GLVFUHWLRQ ZKLFK LQFOXGHG mLQWLPDWH
     7KH JRYHUQPHQW GLVSXWHV WKH H[LVWHQFH RI DQ\ LQIRUPDO DJUHHPHQW
WR WKLV HIIHFW WKRXJK FRXQVHO IRU WKH 8QLWHG 6WDWHV UHFRXQWHG WR WKH WULDO      NQRZOHGJH RI WKH FDVK WUDQVIHU RI VWRUH VDOHV UHFHLSWV
MXGJH WKDW KH KDG WROG 'XSUHHjV FRXQVHO WKDW KH ZRXOG EH mSUHGLVSRVHGl             DFFHVV WR   VWRUH VXUYHLOODQFH FDPHUDV DQG
WR JLYLQJ KLP QRWLFH DQG DQ RSSRUWXQLW\ IRU 'XSUHH WR WXUQ KLPVHOI LQ
                                                                                 LQYROY>HPHQW@LQDQ\LQYHVWLJDWLRQRIZURQJGRLQJDWWKH
SULRU WR DQ\ DUUHVW &RXQVHO DOVR VWDWHG KRZHYHU WKDW LQ WKH LQWHULP WKH
                                                                                 VWRUH LQFOXGLQJ WKH LQYHVWLJDWLRQ RI WKLV FULPHl  7KH
                                                                                 JRYHUQPHQWIXUWKHUQRWHV'XSUHHjVDWWHPSWVWRFDVWVXVSLFLRQ
JRYHUQPHQW OHDUQHG WKDW WKH ZHDSRQ XVHG LQ WKH UREEHU\ ZDV KLGGHQ LQ
'XSUHHjV KRXVH VR WKDW LW IHDUHG GHVWUXFWLRQ RI HYLGHQFH LI DQ\ DGYDQFH
ZDUQLQJ RI 'XSUHHjV DUUHVW ZDV JLYHQ                                            RQ D VWRUH PDQDJHU DQG WKH DUPRUHG WUXFN JXDUG LQ WKH
                                                                                 DIWHUPDWKRIWKHUREEHU\ZKLOHDWZRUN7KHVH DVSHFWVRI
                                                                                'XSUHHjVFRQGXFWWKHJRYHUQPHQWDUJXHVUHQGHUWKLVFDVH
     *LOOLJDQ WHVWLILHG DW WULDO WKDW 'XSUHH WROG KHU LQ WKLV LQWHUYLHZ WKDW
KH NQHZ &ORSWRQ DQG 7XIQHOO ZDQWHG PRQH\ ZHUH VHULRXV DERXW WKH                 PRUHVLPLODUWR8QLWHG6WDWHVY'XHUVRQ)GWK
UREEHU\ DQG KDG YLVLWHG 9DOXH &LW\ SULRU WR WKH UREEHU\ WR IDPLOLDUL]H
   8QLWHG6WDWHVY'XSUHH                         1R     1R                          8QLWHG6WDWHVY'XSUHH            

  +HZDVWKHJX\ZKRZDVKLUHGEHFDXVHRIKLVH[SHULHQFH               'XSUHH FLWHV WKH SURSRVLWLRQ HQXQFLDWHG LQ (GZDUGV Y
  DQG VSHFLDO H[SHUWLVH LQ WKH DUHD RI VHFXULW\  +H KDG   $UL]RQD86WKDWRQFHDQDFFXVHGLQYRNHV
  NQRZOHGJH WKDW RWKHUV GLG QRW KDYH DQG KH DOVR KDG       KLV ULJKW WR FRXQVHO GXULQJ FXVWRGLDO LQWHUURJDWLRQ WKDW
  DFFHVVWKDWRWKHUVGLGQRWKDYH)RUH[DPSOHKHNQHZ             LQWHUURJDWLRQ PXVW FHDVH XQWLO FRXQVHO LV PDGH DYDLODEOH
  WKHORFDWLRQDQGVLJKWOLQHVRIWKHFDPHUDVKHPRYHGWKH          XQOHVVWKHDFFXVHGLQLWLDWHVIXUWKHUFRPPXQLFDWLRQZLWKWKH
  FDPHUDV  +H NQHZ WKH WLPH DQG GD\ RI DUULYDO RI WKH    SROLFH6HHLGDW)XUWKHU(GZDUGVVWDWHGWKDWHYHQ
  DUPRUHGFDUVDQGZKHQWKHUHZRXOGEHPRUHPRQH\+H               LQDPHHWLQJLQLWLDWHGE\WKHDFFXVHG
  KDG DFFHVV WR WKH PRQLWRU URRP VR SHRSOH FRXOG QRW
  REVHUYHKLVFRGHIHQGDQWV1RWDOOHPSOR\HHVKDGWKDW               LWLVOLNHO\WKDWWKHRIILFHUVZLOOVD\RUGRVRPHWKLQJWKDW
  NLQGRIWUXVWDQGUHVSRQVLELOLW\SODFHGLQWKHP                     FOHDUO\ ZRXOG EH mLQWHUURJDWLRQl  ,Q WKDW HYHQW WKH
     +HjVOLNH,VDLGQRWDVDOHVFOHUN+HZDVWKHSHUVRQ          TXHVWLRQZRXOGEHZKHWKHUDYDOLGZDLYHURIWKHULJKWWR
  HQWUXVWHGZLWKVHFXULW\$QGKHYLRODWHGWKHWUXVWSODFHG           FRXQVHO KDG RFFXUUHG WKDW LV ZKHWKHU WKH SXUSRUWHG
  LQ KLP LQ WKDW KH VHW XS DQG SHUPLWWHG WKLV SDUWLFXODU     ZDLYHUZDVNQRZLQJDQGLQWHOOLJHQWDQGIRXQGWREHVR
  UREEHU\WRWDNHSODFH2IDOOWKHSODFHVWKDW7XIQHOO           XQGHU WKH WRWDOLW\ RI WKH FLUFXPVWDQFHV LQFOXGLQJ WKH
  DQG&ORSWRQFRXOGKDYHUREEHGZK\ZRXOGWKH\SLFN              QHFHVVDU\IDFWWKDWWKHDFFXVHGQRWWKHSROLFHUHRSHQHG
  WKH RQO\ VWRUH ZKHUH WKH SHUVRQ LQ FKDUJH RI VHFXULW\       WKHGLDORJXHZLWKWKHDXWKRULWLHV
  FRXOGUHFRJQL]HWKHP"7KDWZDVWKH9DOXH&LW\6WRUH
  ,PHDQWKH\NQHZ1RRQHGLVDJUHHVZLWKWKHIDFWWKDW            ,GDWQ'XSUHHDUJXHVWKDWKHZDVUHSUHVHQWHGDIDFW
  WKH\NQHZ0U'XSUHH:K\ZRXOGWKH\SLFNWKHRQH                 ZKLFKZDVNQRZQE\WKH)%,DQGGHVSLWHWKHH[LVWHQFHRIWKH
  VWRUHZLWKRXWZHDULQJPDVNVZKHUHWKHVHFXULW\JXDUG             LQIRUPDODJUHHPHQWKLVFRXQVHOZDVQHYHUFRQWDFWHGWKXV
  ZRXOGUHFRJQL]HWKHP"$QGWKDWVKRZVWKDWWKH\SLFNHG             XQGHUWKHWRWDOLW\RIWKHFLUFXPVWDQFHVKLVZDLYHUZDVQRW
  DVWRUHEHFDXVHWKH\NQHZWKDWLWZDVVHWXSIRUWKHPDQG          NQRZLQJDQGLQWHOOLJHQW
  WKDWWKHHPSOR\HURI0U'XSUHHWUXVWHG0U'XSUHHDQG
  SXWWKDWNLQGRIWUXVWLQKLP                                       (GZDUGV KRZHYHU LV LQDSSOLFDEOH DV 'XSUHH GRHV QRW
     ,WjVQRWDSRVLWLRQRIWUXVWLQWKHVDPHVHQVHSHUKDSV        DVVHUWWKDWKHDVNHGIRUFRXQVHO7KHUHTXHVWIRUFRXQVHOPXVW
  WKDW D EDQN YLFHSUHVLGHQW KDV DV GLVWLQJXLVKHG IURP D     EHH[SUHVVDQGXQDPELJXRXVLQRUGHUWRUHTXLUHWKHFHVVDWLRQ
  ERRNNHHSHURUDWHOOHUDWDEDQN,GRQjWWKLQNDWHOOHUKDV      RITXHVWLRQLQJ6HH'DYLVY8QLWHG6WDWHV86
  DSRVLWLRQRIWUXVW,WKLQNDYLFHSUHVLGHQWGRHV%XW          0RUHRYHUm>W@KHPHUHIDFWWKDWWKHJRYHUQPHQWLV
  KHUH\RXKDYHWKHVSHFLILFSHUVRQLQFKDUJHRIVHFXULW\            DZDUHWKDWDVXVSHFWKDVDQDWWRUQH\RULVVRRQWRKDYHRQH
  ZKRLVWUXVWHGWRHQIRUFHVHFXULW\QRWWRFRPSURPLVHWKH          GRHV QRW XQDPELJXRXVO\ DVVHUW WKH VXVSHFWjV ULJKW WR GHDO
  VHFXULW\RUEHWUD\LWDFWXDOO\                                   H[FOXVLYHO\ZLWKWKHSROLFHWKURXJKFRXQVHOGXULQJFXVWRGLDO
     6R ,jP JRLQJ WR JLYH KLP WZR SRLQWV IRU EUHDFK RI
  SRVLWLRQRIWUXVW
                                                                     WKHPVHOYHV ZLWK LWV OD\RXW DQG WR REVHUYH WKH DUPRUHG FDU PHVVHQJHU

2XUUHYLHZRIWKHGLVWULFWFRXUWjVGHWHUPLQDWLRQWKDW'XSUHH         'XSUHH KDG WROG 7XIQHOO DQG &ORSWRQ WKDW KH KDG IRUPHUO\ ZRUNHG DV D

KHOGDSRVLWLRQRIWUXVWIRUSXUSRVHVRIWKHHQKDQFHPHQWLVGH       PHVVHQJHU IRU DQ DUPRUHG FDU FRPSDQ\     *LOOLJDQ DOVR VDLG WKDW 'XSUHH


QRYR8QLWHG6WDWHVY5DJODQG)GWK&LU          NQHZ WKDW 7XIQHOO KDG JRQH LQWR WKH VWRUH SUHYLRXVO\ LQWHQGLQJ WR URE WKH
                                                                     JXDUG EXW GLG QRW EHFDXVH WKHUH ZHUH WRR PDQ\ SHRSOH DURXQG     )LQDOO\
                                                               *LOOLJDQ UHFRXQWHG 'XSUHHjV DGPLVVLRQ WKDW WKUHH RU IRXU GD\V EHIRUH WKH
                                                                     UREEHU\ KH KDG JLYHQ KLV JXQ WR &ORSWRQ DQG JRW LW EDFN D GD\ RU WZR
                                                                     DIWHU WKH UREEHU\   'XSUHH SXUSRUWHGO\ WROG *LOOLJDQ WKDW KH VXVSHFWHG
                                                                     7XIQHOO KDG FRPPLWWHG WKH UREEHU\
       8QLWHG6WDWHVY'XSUHH                         1R        1R                       8QLWHG6WDWHVY'XSUHH       

LQWHUURJDWLRQl8QLWHG6WDWHVY6XDUH])G                GLUHFWFRQWURORUXOWLPDWHGHFLVLRQPDNLQJDXWKRULW\LVQRW
WK&LUFHUWGHQLHG86*LOOLJDQ              UHTXLUHGIRUOHDGHUVKLSHQKDQFHPHQWl8QLWHG6WDWHVY&UX]
WHVWLILHGWKDWZKHQVKHLQWHUYLHZHG'XSUHHKHGLGQRWDSSHDU             1R:/DWWK&LU$SU
WREHXQGHUWKHLQIOXHQFHRIDQ\GUXJVRUDOFRKRODQGKHZDV              )LQDOO\LQDYHU\UHFHQWDQGVWULNLQJO\VLPLODUFDVHWKLVFRXUW
FRKHUHQWDQGDUWLFXODWH6KHWROGKLPWKDWVKHZDVQRWWKHUH              DIILUPHG WKH IROORZLQJ ILQGLQJV RI WKH GLVWULFW FRXUW DV
WRTXHVWLRQKLP DQG LQVWUXFWHGKLPWRUHDGWKHFRPSODLQW               VXIILFLHQWWRVXSSRUWDQHQKDQFHPHQW
*LOOLJDQIXUWKHUWHVWLILHGWKDWZKHQ'XSUHHLQGLFDWHGWKDWKH
ZDQWHGWRWDONVKHDGYLVHGKLPm<RXPDNHVXUHWKDWjVUHDOO\                 :LWK UHVSHFW WR WKH 5HG =RQH >1LJKWFOXE@ >WKH
ZKDW\RXZDQWWRGR<RXGRQjWKDYHWRGRWKLV%XW\RX                GHIHQGDQW@KDGLQVLGHLQIRUPDWLRQHVVHQWLDOO\+HZDV
UHDOO\KDYHWREHVXUHLIWKDWjVZKDW\RXZDQWWRGRl'XSUHH               WKHGLUHFWRURIVHFXULW\KHNQHZWKHLQWHUQDORSHUDWLRQV
VLJQHG WZR VHSDUDWH ZDLYHUV LQLWLDOLQJ HDFK SDUDJUDSK               RIWKH5HG=RQHKHSURYLGHG>WKHUREEHU@QRWRQO\ZLWK
ZKLFKZHUHZLWQHVVHGE\DQRWKHUGHWHFWLYHDQGSURGXFHGDW                    WKHLQWHUQDOSODQVRIWKHOD\RXWRIWKH5HG=RQHEXWKH
WULDO7KRXJKFRXQVHOIRU'XSUHHDVVHUWVWKDWm>W@KHUHFRUGLQ              WROG KLP DERXW \RX NQRZ WKH WLPH WKDW HYHU\WKLQJ
WKLVFDVHLVQRWVRFOHDUlUHJDUGLQJZKHWKHUWKHZDLYHUVZHUH                FUXFLDOWRWKHUREEHU\WRRNSODFH+HJDYH>WKHUREEHU@
YROXQWDULO\ VLJQHG 'XSUHH GRHV QRW FKDOOHQJH *LOOLJDQjV               WKHWRROVQHFHVVDU\WRFRPSOHWHWKHUREEHU\KHDUUDQJHG
WHVWLPRQ\RUSUHVHQWDQ\IDFWVZKLFKZRXOGOHDGWKHFRXUWWR                 IRU >WKH UREEHU@ WR WUDYHO LQWR WRZQ WR FRPPLW WKH
FRQFOXGHRWKHUZLVH8QGHUWKHWRWDOLW\RIWKHFLUFXPVWDQFHV                UREEHU\KHVKRZHGKLPZKHUHWREUHDNLQDQGGHWDLOHG
WKHVWDWHPHQWVZHUHSURSHUO\DGPLWWHG                                      KRZLWZRXOGEHEHVWWREUHDNLQDQGDGYLVHGKLPDVWR
                                                                             ZKHUHWKHPRQH\ZDVVWRUHG>7KHGHIHQGDQW@SURYLGHG
& 0RWLRQIRUD1HZ7ULDO                                                    >WKHUREEHU@ZLWKWKHNQLIHGXFWWDSHDQGWZRZD\UDGLR
                                                                             WR XVH  $QG VR ZKHQ \RX ORRN DW DOO WKRVH WKLQJV
  $W WULDO sHDQ +XQW WKH PDQDJHU RI WKH ORVV SUHYHQWLRQ           WRJHWKHULWjVIDLUO\FOHDUWKDWDWZROHYHOHQKDQFHPHQWLV
GHSDUWPHQWDW9DOXH&LW\WHVWLILHGWKDWVWRUHSROLF\GLFWDWHG              DSSURSULDWHDVKHZDVWKHOHDGHUDQGRUJDQL]HU
WKDWDVWRUHVXUYHLOODQFHFDPHUDEHGLUHFWHGWRZDUGWKHIURQW
GRRUVRIWKHVWRUHDWDOOWLPHV$SHUVRQFRXOGRQO\FKDQJH               8QLWHG6WDWHVY7DQLJXFKL1RV:/
WKHGLUHFWLRQRIWKHFDPHUDVIURPWKHORVVSUHYHQWLRQRIILFH              DWWK&LU2FW*LYHQWKLVFRXUWjV
WR ZKLFK RQO\ XSSHU PDQDJHPHQW DQG WKH ORVV SUHYHQWLRQ             UHFHQWUHIHUHQFHWRDPRUHGHIHUHQWLDOVWDQGDUGRIUHYLHZZH
GHSDUWPHQWVKHDQG'XSUHHKDGDFFHVV6KHIXUWKHUWHVWLILHG             XSKROGWKHHQKDQFHPHQWEDVHGRQWKHGLVWULFWFRXUWjVILQGLQJV
WKDW ZKHQ VKH OHIW WKH ORVV SUHYHQWLRQ RIILFH WR JR WR D
UHJXODUO\VFKHGXOHGPDQDJHPHQWPHHWLQJGXULQJZKLFKWKH                        $EXVHRID3RVLWLRQRI7UXVW
UREEHU\ZDVFRPPLWWHGDFDPHUDZDVIRFXVHGRQWKHIURQW
                                                                             )LQDOO\ 'XSUHH FRQWHQGV WKDW WKH GLVWULFW FRXUW HUUHG E\
                                                                           DSSO\LQJWKHWZROHYHOHQKDQFHPHQWDUWLFXODWHGLQ%RI
                                                                          WKH6HQWHQFLQJ*XLGHOLQHVZKLFKDSSOLHVm>L@IWKHGHIHQGDQW
     *LYHQ WKLV FRQFOXVLRQ LW LV XQQHFHVVDU\ WR DGGUHVV WKH SDUWLHVj      DEXVHGDSRVLWLRQRISXEOLFRUSULYDWHWUXVWRUXVHGDVSHFLDO
GLVSXWH DV WR ZKHWKHU DQ\ HUURU LQ DGPLWWLQJ WKH VWDWHPHQWV ZRXOG EH
                                                                           VNLOOLQDPDQQHUWKDWVLJQLILFDQWO\IDFLOLWDWHGWKHFRPPLVVLRQ
KDUPOHVV
                                                                           RUFRQFHDOPHQWRIWKHRIIHQVHl7KHGLVWULFWFRXUWKHOG
    
        +XQW KDG SUHYLRXVO\ ZRUNHG ZLWK 'XSUHH DV D PHVVHQJHU IRU WKH
                                                                             0U'XSUHHZDVWKHSHUVRQDW9DOXH&LW\DWWKHWLPH
%ULQNV DUPRUHG FDU FRPSDQ\ VKH FRQVLGHUHG KLP D IULHQG DQG KDG
UHFRPPHQGHG KLP IRU WKH MRE LQ ORVV SUHYHQWLRQ DW 9DOXH &LW\ GXH WR KLV
                                                                             RIWKHUREEHU\oZKRZDVHQWUXVWHGZLWKVHFXULW\DWWKH
H[WHQVLYH NQRZOHGJH RI FDPHUD V\VWHPV
                                                                             VWRUH+HZDVQRWDVDOHVFOHUNDVWRFNHURUERRNNHHSHU
     8QLWHG6WDWHVY'XSUHH                              1R        1R                          8QLWHG6WDWHVY'XSUHH            

  (YHQ PRUH UHFHQWO\ KRZHYHU LQ DQ XQSXEOLVKHG                RIWKHVWRUHZKHQVKHUHWXUQHGLPPHGLDWHO\DIWHUWKHUREEHU\
RSLQLRQWKLVFRXUWLQGLFDWHGWKDWWKHmVWDQGDUGRIUHYLHZIRU                 WKDW FDPHUD ZDV IRFXVHG WRZDUG WKH EDFN RI WKH VWRUH LQ
HQKDQFHPHQWVXQGHU%LVQRZRSHQWRTXHVWLRQlGXHWR                    KRXVHZDUHV+XQWVWDWHGWKDWVKHKDGQRWPRYHGWKHFDPHUD
WKH6XSUHPH&RXUWjVGHWHUPLQDWLRQLQ%XIRUGY8QLWHG6WDWHV                  DQGWKDWWKHUHZDVQRRQHRWKHUWKDQ'XSUHHZKRKDGDNH\WR
 86   WKDW D GLVWULFW FRXUWjV DSSOLFDWLRQ RI            WKHORVVSUHYHQWLRQRIILFHDQGZDVDWZRUNWKDWGD\EXWZDV
866*  % VKRXOG EH UHYLHZHG XQGHU D GHIHUHQWLDO                    QRWDWWKHPDQDJHPHQWPHHWLQJ
VWDQGDUGUDWKHUWKDQGHQRYR8QLWHG6WDWHVY:LOOLDPV1R
:/DWWK&LU2FW                      )ROORZLQJ WKH WULDO LQ SUHSDUDWLRQ IRU VHQWHQFLQJ WKH
REVHUYLQJWKDWm>D@VLQJOHFOHDUHUURUVWDQGDUGLVFRQVLVWHQW                 GLVWULFWFRXUWUHDGDOHWWHULWKDGUHFHLYHGIURP+XQWSULRUWR
ZLWKWKH6XSUHPH&RXUWjV%XIRUGKROGLQJ                                    WKHWULDO7KHOHWWHUVWDWHGLQSDUW
   ,QWKHLQVWDQWFDVHLWDSSHDUVWKDWWKHGLVWULFWFRXUWDSSOLHG               , NQRZ RQH RI WKH WKLQJV WKH\ ZHUH VD\LQJ ZDV 5RQ
WKHHQKDQFHPHQWRI%UDWKHUWKDQXSZDUGO\GHSDUWLQJ                      PRYHGWKHFDPHUDVWKHFDPHUDVDUHIRUVXUYHLOODQFHRQ
)XUWKHU WKRXJK WKH GLVWULFW FRXUW FOHDUO\ HQXPHUDWHG LWV                 VKRSOLIWHUVLQWKHVWRUHWKHRQO\WLPHWKHUH>VLF@RQDGRRU
IDFWXDO ILQGLQJV UHJDUGLQJ WKLV HQKDQFHPHQW LW GLG QRW                   LVZKHQ\RXU>VLF@QRWZDWFKLQJVRPHRQH,ZDVXVLQJ
H[SOLFLWO\ ILQG WKDW 'XSUHH OHG RUJDQL]HG PDQDJHG RU                   WKH UHFRUGHUWRUHFRUGDFDVKLHUZKRZDVVXVSHFWHGRI
VXSHUYLVHGDQ\RIWKHRWKHUSDUWLFLSDQWV:HFDQLQIHUWKLV                     VWHDOLQJ5RQZRXOGQRWKDYHNQRZQWKDWXQWLOKHFDPH
ILQGLQJKRZHYHUIURPWKHGLVWULFWFRXUWjVHQXPHUDWHGIDFWV                    LQ WKDW GD\  :H RQO\ KDG RQH UHFRUGHU KRRNHG WR D
7KH NH\ LV WKDW 'XSUHH VXSSOLHG WKH JXQ DQG LQVLGHU                     FDPHUD7KDWV>VLF@WKHRQH,ZDVXVLQJ
LQIRUPDWLRQDERXWWKHVWRUHDQGWKHDUPRUHGWUXFNVHUYLFHLQ
WKLVVHQVHKHVXSHUYLVHG7XIQHOODQG&ORSWRQ$QRWKHUUHFHQW                 7KH GLVWULFW FRXUW UHFRJQL]LQJ WKH SRWHQWLDO LQFRQVLVWHQF\
FDVHTXRWHVWKHEDFNJURXQGQRWHVWR%FZKLFKVWDWH                    ZLWK +XQWjV WHVWLPRQ\ DW WULDO IRUZDUGHG WKH OHWWHU WR WKH
WKDW                                                                          SDUWLHV'XSUHHILOHGDPRWLRQIRUDQHZWULDODQGWKHFRXUW
                                                                               KHOGDQHYLGHQWLDU\KHDULQJ$WWKDWKHDULQJ+XQWUHDIILUPHG
  ,Q UHODWLYHO\ VPDOO FULPLQDO HQWHUSULVHV WKDW DUH QRW                 KHU WULDO WHVWLPRQ\ WKDW WKH FDPHUD KDG EHHQ PRYHG EXW
  RWKHUZLVHWREHFRQVLGHUHGDVH[WHQVLYHLQVFRSHRULQ                       FODULILHGWKDWDQ\FDPHUDGLUHFWHGDWWKHGRRUZRXOGQRWKDYH
  SODQQLQJ RU SUHSDUDWLRQ WKH GLVWLQFWLRQ EHWZHHQ                        EHHQUHFRUGLQJDFWLYLW\RQWDSH7KHFRXUWGHQLHG'XSUHHjV
  RUJDQL]DWLRQDQGOHDGHUVKLSDQGWKDWRIPDQDJHPHQWRU                       PRWLRQIRUDQHZWULDOILQGLQJWKDWWKHOHWWHUGLGQRWLPSHDFK
  VXSHUYLVLRQ LV RI OHVV VLJQLILFDQFH WKDQ LQ ODUJHU                   +XQWjVWHVWLPRQ\DVWKHUHZHUHUHDVRQV'XSUHHPLJKWKDYH
  HQWHUSULVHVWKDWWHQGWRKDYHFOHDUO\GHOLQHDWHGGLYLVLRQV                   PRYHG WKH FDPHUD IURP WKH IURQW GRRUV HYHQ LI LW ZDV QRW
  RIUHVSRQVLELOLW\7KLVLVUHIOHFWHGLQWKHLQFOXVLYHQHVVRI                 UHFRUGLQJIRUH[DPSOHWRDYRLGWKHSRVVLELOLW\WKDWVRPHRQH
  %F                                                                   ZRXOGZDONLQWRWKHORVVSUHYHQWLRQGHSDUWPHQWDQGREVHUYH
                                                                               WKH UREEHUV RQ WKH PRQLWRU  7KH FRXUW DOVR IRXQG WKDW D
8QLWHG6WDWHVY&RZKHUG1R:/                        UHDVRQDEOHMXU\FRXOGKDYHIRXQGWKHWHVWLPRQ\RI7XIQHOODQG
DWWK&LU6HSW$GGLWLRQDOO\mHYLGHQFHRI                   &ORSWRQFUHGLEOHDQGFRPELQHGZLWKWKHREMHFWLYHHYLGHQFH
                                                                               OLQNLQJ'XSUHHWRWKHFULPHmFRXOGOHDGWRDFRQFOXVLRQE\D
     
       ,Q   :LOOLDPV   KRZHYHU WKH FRXUW IRXQG WKDW WKH DSSOLFDWLRQ RI WKH
                                                                                   
HQKDQFHPHQW ZRXOG EH DIILUPHG XQGHU HLWKHU D GHIHUHQWLDO RU        GH QRYR          7KH OHWWHU ZDV VHQW IRU XVH DW 'XSUHHjV VHQWHQFLQJ EHIRUH KH
VWDQGDUG GXH WR WKH GLVWULFW FRXUWjV ILQGLQJ WKDW WKH GHIHQGDQW VXSHUYLVHG    GHFLGHG WR ZLWKGUDZ KLV SOHD DQG JR WR WULDO WKH GLVWULFW FRXUW KRZHYHU
DQRWKHU SDUWLFLSDQW GXULQJ WKH RIIHQVH    ,G   DW                         GLG QRW UHDG WKH OHWWHU XQWLO DIWHU WKH WULDO
       8QLWHG6WDWHVY'XSUHH                        1R        1R                         8QLWHG6WDWHVY'XSUHH          

UHDVRQDEOH MXU\  WKDW WKH GHIHQGDQW ZDV JXLOW\ EH\RQG D        ZLWKGHIHQVHFRXQVHOWKDWLWZDVQRWZDUUDQWHG,GDW
UHDVRQDEOHGRXEWl                                                         2Q DSSHDO WKLV FRXUW QRWHG WKDW DV 9DQGHEHUJ KDG SOHG
                                                                           JXLOW\ WKH GLVWULFW FRXUW mODFNHG WKH DGYDQWDJH RI KDYLQJ
   'XSUHHDUJXHVWKDWWKHUHYHODWLRQWKDWWKHFDPHUDZKLFKKDG             REVHUYHG D WULDOl ,G DW   0RUHRYHU ZH UHYLHZHG WKH
EHHQIRFXVHGRQWKHIURQWGRRUFRXOGQRWUHFRUGJUHDWO\DIIHFWV            UHFRUGDQGGHWHUPLQHGWKDW
WKHJRYHUQPHQWjVHIIRUWVWROLQNKLPWRWKHFRQVSLUDF\LQWKDW
LWXQGHUPLQHVWKHQHFHVVLW\RIKLVEHLQJSUHVHQWDWZRUNWKDW                $OWKRXJK 9DQGHEHUJ SURYLGHG >WKH EXUJODU@ KLV FR
GD\ WR HQVXUH WKDW WKH FDPHUD SRLQWHG DW WKH IURQW GRRUV          FRQVSLUDWRULQIRUPDWLRQFUXFLDOWRKHOSLQJ>WKHEXUJODU@
ZRXOGQRWUHFRUGWKHUREEHUV+HIXUWKHUDVVHUWVWKDWWKLV                EXUJODUL]H WKH KRXVH WKHUH LV QR LQGLFDWLRQ WKDW
IDFWZDVSUHVHQWHGLQDFRQIXVLQJIDVKLRQmZKLFKOLNHO\OHIW                9DQGHEHUJHLWKHUUHFUXLWHG>WKHEXUJODU@RUH[HUFLVHGDQ\
WKHRSSRVLWHLPSUHVVLRQIURPZKDWWKHUHDOIDFWVZHUHlDQG                  DXWKRULW\RYHUKLP9DQGHEHUJQHLWKHUFODLPHGDULJKW
HQWLWOHVKLPWRDQHZWULDO7KLV&LUFXLWUHFRJQL]HVDIRXUSDUW            WR D ODUJHU VKDUH RI WKH IUXLWV RI WKH FULPH QRU WRRN D
WHVW LQ GHWHUPLQLQJ ZKHWKHU QHZO\GLVFRYHUHG HYLGHQFH                   OHDGHUVKLS UROH LQ SODQQLQJ WKH GHWDLOV RI WKH RIIHQVH
ZDUUDQWVDQHZWULDOWKHHYLGHQFHZDVGLVFRYHUHGDIWHUWKH              5DWKHULWDSSHDUVWKDW>WKHEXUJODU@LQLWLDWHGWKHFULPLQDO
WULDOLWFRXOGQRWKDYHEHHQGLVFRYHUHGHDUOLHUZLWKGXH                DFWLYLW\ H[HUFLVHG KLV RZQ GHFLVLRQPDNLQJ DXWKRULW\
GLOLJHQFHWKHQHZHYLGHQFHLVPDWHULDODQGQRWPHUHO\                   DQGUHWDLQHGSRVVHVVLRQRYHUPDQ\RIWKHVWROHQLWHPV
FXPXODWLYHRULPSHDFKLQJDQGWKHHYLGHQFHZRXOGOLNHO\
SURGXFHDQDFTXLWWDOLIWKHFDVHZHUHUHWULHG8QLWHG6WDWHVY           ,GDW7KLVFDVHVXJJHVWVDORZHUOHYHORILQYROYHPHQW
*ORYHU)GWK&LU7KHGLVWULFWFRXUW              WKDQ H[LVWV LQ RXU FDVH EHFDXVH 'XSUHH SURYLGHG WKH JXQ
IRXQGWKHILUVWWZRIDFWRUVVDWLVILHGEXWXOWLPDWHO\FRQFOXGHG            XVHGPRYHGWKHVXUYHLOODQFHFDPHUDVDQGZDVDWZRUNDWWKH
WKDW+XQWjVOHWWHUGLGQRWLPSHDFKKHUWULDOWHVWLPRQ\DQGWKDW           WLPHRIWKHUREEHU\
WKH HYLGHQFHZDVVXFKWKDWLWZRXOGQRWKDYHSURGXFHGDQ
DFTXLWWDO                                                                   ,Q8QLWHG6WDWHVY&DVHVORUHQWH)GWK&LU
                                                                            WKLV FRXUW UHFRXQWHG WKH KLVWRU\ RI WKH  %
  m>0@RWLRQV IRU D QHZ WULDO EDVHG RQ QHZO\GLVFRYHUHG              HQKDQFHPHQWQRWLQJWKDWSULRUWRWKH6L[WK&LUFXLWKHOG
HYLGHQFHDUHGLVIDYRUHGDQGVKRXOGEHJUDQWHGZLWKFDXWLRQl               WKDW mLW ZDV VXIILFLHQW WR VKRZ PHUHO\ WKDW D GHIHQGDQW
*ORYHU  )G DW   7KRXJK +XQWjV OHWWHU PLJKW EH           H[HUFLVHG VRPH PHDVXUH RI OHDGHUVKLS RYHU WKH FULPLQDO
YLHZHG DV LPSHDFKLQJ KHU WULDO WHVWLPRQ\ WKDW LW ZDV VWRUH        DFWLYLW\lIRUWKHHQKDQFHPHQWWRDSSO\,GDW7KLVYLHZ
SROLF\ WR KDYH D FDPHUD IRFXVHG RQ WKH IURQW GRRUV DW DOO       FRQWUDVWHG ZLWK WKDW RI RWKHU &LUFXLWV ZKLFK UHTXLUHG D
WLPHV VKH UHDIILUPHG KHU WHVWLPRQ\ WKDW WKH FDPHUD ZDV            VKRZLQJWKDWWKHGHIHQGDQWH[HUFLVHGFRQWURORYHUDWOHDVWRQH
PRYHG7KHUHPD\KDYHEHHQVRPHFRQIXVLRQDWWULDODVWR                  SDUWLFLSDQWLQWKHFULPLQDOVFKHPH,G,QKRZHYHU
ZKHWKHUWKHFDPHUDIRFXVHGRQWKHIURQWGRRUZDVUHFRUGLQJ                $SSOLFDWLRQ 1RWH  RI WKH FRPPHQWDU\ WR  % ZDV
EXWWKHWULDOFRXUWZDVFRUUHFWLQQRWLQJWKDW'XSUHHZRXOG                DPHQGHGWRFODULI\WKDWZKLOHWKHGHIHQGDQWPXVWKDYHOHG
KDYH KDG UHDVRQV IRU EHLQJ DW WKH VWRUH WKDW GD\ DQG IRU        RUJDQL]HGPDQDJHGRUVXSHUYLVHGDQRWKHUSDUWLFLSDQWLQRUGHU
PRYLQJWKHFDPHUDDSDUWIURPLWVDELOLW\WRUHFRUGWKHUREEHUVj            WRTXDOLI\IRUDVHQWHQFHHQKDQFHPHQWDQXSZDUGGHSDUWXUH
                                                                           PLJKWEHMXVWLILHGZKHUHWKHGHIHQGDQWH[HUFLVHGPDQDJHPHQW
                                                                           UHVSRQVLELOLW\ RYHU WKH FULPLQDO RUJDQL]DWLRQjV SURSHUW\
     
      &ORSWRQ KDG WHVWLILHG DW WULDO WKDW KH ZDV FRQFHUQHG DERXW EHLQJ
                                                                           DVVHWV RU DFWLYLWLHV  7KLV GLVWLQFWLRQ ZDV FRQILUPHG LQ
YLGHRWDSHG E\ WKH 9DOXH &LW\ VXUYHLOODQFH FDPHUDV SDUWLFXODUO\ WKH RQH    VXEVHTXHQWFDVHV6HH&DVHVORUHQWH)GDWFLWLQJ
WUDLQHG RQ WKH IURQW GRRU EXW WKDW 'XSUHH WROG KLP QRW WR ZRUU\ EHFDXVH   8QLWHG 6WDWHV Y *RUW'L'RQDWR  )G  WK &LU
KH KDG DFFHVV WR mWDNH FDUH RIl WKH FDPHUDV
    8QLWHG6WDWHVY'XSUHH                          1R       1R                       8QLWHG6WDWHVY'XSUHH        

KDGVHOHFWHGWKHEDQNWRUREUHFUXLWHGWKHPWRDVVLVWUHQWHG           HQWU\0RUHRYHU+XQWDSSDUHQWO\QHYHUVWDWHGDWWULDOWKDW
D FDU DQG D PRWHO URRP LQ SUHSDUDWLRQ IRU WKHLU IOLJKW        WKH FDPHUD IRFXVHG RQ WKH IURQW GRRUV ZDV UHFRUGLQJ VKH
SURYLGHGWKHZHDSRQDVZHOODVPDWHULDOVWRUHVWUDLQWKHEDQN            WHVWLILHGWKDWRQO\WZRFDPHUDVFRXOGUHFRUGDWDWLPHEXWWKDW
HPSOR\HHV GLVDEOHG WKH VXUYHLOODQFH FDPHUD DQG WRRN WKH         D SHUVRQ FRXOG VZLWFK ZKLFK FDPHUD ZDV UHFRUGLQJ E\
WDSH3DUNHU:/DW7KHGHIHQGDQWKDG                 SXVKLQJDEXWWRQ*LYHQWKHVHFLUFXPVWDQFHVWKHWULDOFRXUW
DOVRGLVSRVHGRI LQFULPLQDWLQJHYLGHQFHDQGWDNHQDODUJHU              GLGQRWDEXVHLWVGLVFUHWLRQLQGHQ\LQJ'XSUHHjVPRWLRQIRUD
VKDUHRIWKHSURFHHGVIURPWKHFULPHSXUSRUWHGO\WRSD\RII             QHZWULDOEDVHGRQ+XQWjVOHWWHU6HHHJ*ORYHU)GDW
DQmLQVLGHUlDWWKHEDQN,G7KHVHFDVHVDUHPDUNHGE\D              WHVWLPRQ\RIFRQYLFWHGGUXJGHDOHUWKDWKHQRWWKH
KLJKHU OHYHO RI OHDGHUVKLS RU FRQWURO WKDQ LV DOOHJHG LQ WKH   GHIHQGDQWKLGFRFDLQHLQUHVLGHQFHZDVXQOLNHO\WRSURGXFH
LQVWDQWFDVH                                                            DQDFTXLWWDOLIFDVHZHUHUHWULHG
  )XUWKHUWKHJRYHUQPHQWjVDVVHUWLRQWKDW7RFFRFRPSHOVWKH             ' 3URVHFXWRULDO9LQGLFWLYHQHVV
DSSOLFDWLRQRIWKLVHQKDQFHPHQWWR'XSUHHGXHWRLWVKROGLQJ
WKDW ZKHUH FRFRQVSLUDWRUV FDQQRW HQJDJH LQ H[WRUWLRQDWH             'XSUHHFRQWHQGVWKDWWKHIDFWWKDWKHZDVFKDUJHGZLWKDQG
DFWLYLWLHVZLWKRXWWKHGHIHQGDQWjVSHUPLVVLRQLWLVUHYHUVLEOH          FRQYLFWHG RI YLRODWLQJ  86&   F  $ LL o
HUURU QRW WR DSSO\ WKH HQKDQFHPHQW IRU WKH GHIHQGDQWjV           EUDQGLVKLQJ D ILUHDUP GXULQJ DQG LQ UHODWLRQ WR D FULPH RI
VXSHUYLVRU\UROHLVQRWSHUVXDVLYH6HH7RFFR)GDW             YLROHQFH o GHVSLWH WKH NQRZOHGJH WKDW  RQO\ 7XIQHOO
7KHFRXUWjVILQGLQJLQ7RFFRLQYROYHGDQDOOHJHGPDILD             SRVVHVVHGDQGEUDQGLVKHGWKHILUHDUPDQGWKLVFKDUJHZDV
ERVVZKRVHFRQWURORYHUFRFRQVSLUDWRUVZDVHVWDEOLVKHGE\               GURSSHG DJDLQVW ERWK 7XIQHOO DQG &ORSWRQ FRQVWLWXWHV
ZLUHWDSSHG FRQYHUVDWLRQV  ,G  'XSUHHjV mFRQWURO RYHU            SURVHFXWRULDO YLQGLFWLYHQHVV  7R HVWDEOLVK YLQGLFWLYH
H[WRUWLRQDWHDFWLYLW\lDOOHJHGKHUHE\WKHJRYHUQPHQWFRQVLVWV           SURVHFXWLRQ'XSUHHPXVWVKRZ
RIKLVDFWLRQVLQDOOHJHGO\WDNLQJ7XIQHOODQG&ORSWRQWKURXJK
WKH VWRUH SRLQWLQJ RXW WKH FDVK ZLQGRZ DQG IDPLOLDUL]LQJ          H[HUFLVH RI D SURWHFWHG ULJKW  WKH SURVHFXWRUjV
WKHPZLWKWKHOD\RXW7KLVFRQGXFWKRZHYHULVPRUHDNLQWR              mVWDNHl LQ WKH H[HUFLVH RI WKDW ULJKW  WKH
WKDW KHOG QRW WR ZDUUDQW D VXSHUYLVRU\ HQKDQFHPHQW LQ              XQUHDVRQDEOHQHVV RI WKH SURVHFXWRUjV FRQGXFW DQG
9DQGHEHUJ)GDW,QWKDWFDVHDQDFTXDLQWDQFHRI              SUHVXPDEO\WKDWWKHSURVHFXWLRQZDVLQLWLDWHGZLWK
9DQGHEHUJEXUJODUL]HGWKHKRPHRI9DQGHEHUJjVHPSOR\HU                    WKHLQWHQWWRSXQLVKWKHSODLQWLIIIRUWKHH[HUFLVHRIWKH
9DQGHEHUJKDGUHOD\HGLQIRUPDWLRQUHJDUGLQJWKHORFDWLRQRI                SURWHFWHG ULJKW  7KXV D SHUVRQ FODLPLQJ WR EH
WKH KRPH WKH DODUP V\VWHP DQG WKH ORFDWLRQ RI D VDIH           YLQGLFWLYHO\SURVHFXWHGPXVWVKRZWKDWWKHSURVHFXWRU
FRQWDLQLQJLWHPVRIYDOXH,GDW1HYHUWKHOHVVWKLVFRXUW          KDGVRPHmVWDNHlLQGHWHUULQJWKHSHWLWLRQHUjVH[HUFLVHRI
IRXQG WKDW 9DQGHEHUJjV DFW RI SURYLGLQJ WKLV mFUXFLDO               KLV ULJKWV DQG WKDW WKH SURVHFXWRUjV FRQGXFW ZDV
LQIRUPDWLRQl WR WKH EXUJODU ZDV QRW HQRXJK WR WULJJHU WKH         VRPHKRZXQUHDVRQDEOH
HQKDQFHPHQWDQGFODULILHGWKDWm>P@HUHO\SOD\LQJDQHVVHQWLDO
UROHLQWKHRIIHQVHLVQRWHTXLYDOHQWWRH[HUFLVLQJPDQDJHULDO           1DWjO(QJjJ	&RQWUDFWLQJ&RY+HUPDQ)G
FRQWURORYHURWKHUSDUWLFLSDQWVDQGRUWKHDVVHWVRIDFULPLQDO          WK &LU  LQWHUQDO TXRWDWLRQ PDUNV DQG FLWDWLRQV
HQWHUSULVHl,GDW                                                RPLWWHG7KHUHDUHWZRDSSURDFKHVWRVKRZLQJSURVHFXWRULDO
                                                                         YLQGLFWLYHQHVV D GHIHQGDQW FDQ VKRZ  mDFWXDO
  9DQGHEHUJ WKRXJK LV OLNHZLVH GLVWLQJXLVKDEOH  ,Q WKDW
FDVHWKHGLVWULFWFRXUWVXPPDULO\LPSRVHGWKHHQKDQFHPHQW
                                                                             
IRU OHDGHUVKLS GHVSLWH WKH IDFW WKDW WKH JRYHUQPHQW DJUHHG           7KH JRYHUQPHQW FRQWHQGV &ORSWRQ ZDV QHYHU FKDUJHG ZLWK WKLV
                                                                         &RXQW
       8QLWHG6WDWHVY'XSUHH                         1R        1R                       8QLWHG6WDWHVY'XSUHH       

YLQGLFWLYHQHVVl E\ SURGXFLQJ mREMHFWLYH HYLGHQFH WKDW D               8QLWHG 6WDWHV Y 3DUNHU 1R   :/
SURVHFXWRUDFWHGLQRUGHUWRSXQLVKWKHGHIHQGDQWIRUVWDQGLQJ              WK&LU)HE8QLWHG6WDWHVY7RFFR
RQ KLV OHJDO ULJKWVl RU  mD UHDOLVWLF OLNHOLKRRG RI            )GWK&LU
YLQGLFWLYHQHVVlE\XWLOL]LQJWKHIUDPHZRUNRXWOLQHGDERYH
IRFXVLQJRQWKHSURVHFXWRUjVmVWDNHlLQGHWHUULQJWKHH[HUFLVH               7KHTXHVWLRQRIZKHWKHU'XSUHHRU7XIQHOOILUVWSURSRVHG
RIDSURWHFWHGULJKWDQGWKHXQUHDVRQDEOHQHVVRIKLVDFWLRQV              WKHUREEHU\LVPXGGOHGVRPHZKDWE\7XIQHOOjVRZQWHVWLPRQ\
%UDJDQY3RLQGH[WHU)GWK&LU                 UHJDUGLQJKLVmGUHDPlWRUREDQDUPRUHGFDU7XIQHOOGLG
$WWHPSWLQJ WR VKRZ DFWXDO YLQGLFWLYHQHVV KDV EHHQ                     KRZHYHUJRRQWRUHODWHWKDW'XSUHHILUVWPHQWLRQHG6KRRNDV
FKDUDFWHUL]HG DV mH[FHHGLQJO\ GLIILFXOWl DQG DQ mRQHURXV              DSRVVLEOHWDUJHW7XIQHOODOVRVWDWHGWKDW&ORSWRQZDVQRW
EXUGHQl,GDW                                                  LQYROYHGZKHQKHDQG'XSUHHILUVWVWDUWHGWDONLQJEXWWKDWKH
                                                                            7XIQHOO JRW &ORSWRQ LQYROYHG  7KLV DFFRXQW ZDV
   5HJDUGOHVVRIZKHWKHUWKLVFRXUWUHYLHZV'XSUHHjVFODLPGH               FRUURERUDWHG E\ &ORSWRQ  )XUWKHU RQ FURVVH[DPLQDWLRQ
QRYRRUIRUFOHDUHUURULWIDLOV+HDUJXHVWKDWWKHSURVHFXWRU           7XIQHOO FKDUDFWHUL]HG 'XSUHH DV KDYLQJ mSODQQHG DQG
IDLOHG WR GURS WKH ILUHDUPV FKDUJH DJDLQVW KLP EHFDXVH KH          PDVWHUPLQGHGlWKHUREEHU\7KHGLVWULFWFRXUWZDVSULY\WRDOO
H[HUFLVHGKLVSURWHFWHGULJKWWRDMXU\WULDODQGIXUWKHUDVVHUWV          WKLVWHVWLPRQ\KRZHYHUDQGKDGWKHXQLTXHRSSRUWXQLW\RI
WKDWWKHSOHDRIIHUZDVGHVLJQHGWRGHWHUKLPIURPJRLQJWR                 MXGJLQJWKHFUHGLELOLW\RIWKHZLWQHVVHV0RUHRYHUWKHGLVWULFW
WULDO  ,W LV VLJQLILFDQW WR QRWH KRZHYHU WKDW 'XSUHH LV QRW   FRXUWjV ILQGLQJV WKDW 'XSUHH VXSSOLHG WKH JXQ SURYLGHG
DVVHUWLQJWKDWWKHSURVHFXWRUDGGHGDQ\DGGLWLRQDORUPRUH                 LQIRUPDWLRQ DV WR ZKHQ WKH DUPRUHG WUXFN ZRXOG DUULYH
VHYHUHFKDUJHVWRWKHLQGLFWPHQWDIWHUKHHOHFWHGWRJRWRWULDO          VLJQDOHGWR7XIQHOODQG&ORSWRQZKHQLWZDVODWHDQGPRYHG
KHPHUHO\DUJXHVWKDWWKHSURVHFXWRUIDLOHGWRGURS&RXQW,,,              WKH VXUYHLOODQFH FDPHUDV DUH UHOHYDQW WR WKH IDFWRUV RI
DJDLQVWKLPDVKHGLGIRU7XIQHOOZKHQ7XIQHOOSOHGJXLOW\                SDUWLFLSDWLRQLQSODQQLQJWKHRIIHQVHDQGH[HUFLVHRIGHFLVLRQ
7KH SURVHFXWRUjV FRQGXFW LQ SURFHHGLQJ ZLWK WKH IXOO                 PDNLQJDXWKRULW\,WGRHVQRWDSSHDUWKDW'XSUHHUHFUXLWHG
LQGLFWPHQWKRZHYHUFDQQRWEHYLHZHGDVXQUHDVRQDEOH7KH                 WKHRWKHUVRUFODLPHGDODUJHUVKDUHRIWKHSURFHHGVIURPWKH
6XSUHPH&RXUWKDVUHFRJQL]HGWKDWmLQWKHµJLYHDQGWDNHjRI                UREEHU\  $GGLWLRQDOO\ LW LV XQGLVSXWHG WKDW IROORZLQJ WKH
SOHDEDUJDLQLQJWKHUHLVQRVXFKHOHPHQWRISXQLVKPHQWRU                  UREEHU\&ORSWRQNHSWFRQWURORIWKHPRQH\DQGGLVSHQVHGLW
UHWDOLDWLRQVRORQJDVWKHDFFXVHGLVIUHHWRDFFHSWRUUHMHFWWKH          LQUHODWLYHO\VPDOODPRXQWVWR7XIQHOODQG'XSUHH&ORSWRQ
SURVHFXWLRQjVRIIHUl%RUGHQNLUFKHUY+D\HV86                DOVR WRRN UHVSRQVLELOLW\ IRU KLGLQJ WKH JXQV HYHQWXDOO\
   0RUHRYHU ZLWK UHJDUG WR WKH SURVHFXWRUjV              UHWXUQLQJ'XSUHHjVWRKLP
mVWDNHlLQDYRLGLQJDWULDOWKH&RXUWmKDVQHFHVVDULO\DFFHSWHG
DV FRQVWLWXWLRQDOO\ OHJLWLPDWH WKH VLPSOH UHDOLW\ WKDW WKH              7KH FDVHV FLWHG E\ WKH JRYHUQPHQW DV mFRPSHOOLQJl WKH
SURVHFXWRUjVLQWHUHVWDWWKHEDUJDLQLQJWDEOHLVWRSHUVXDGHWKH            HQKDQFHPHQW LQ WKH LQVWDQW FDVH %DQG\ DQG 3DUNHU DUH
GHIHQGDQWWRIRUHJRKLVULJKWWRSOHDGQRWJXLOW\l,GDW            ODUJHO\GLVWLQJXLVKDEOH,Q%DQG\WKHGHIHQGDQWDGPLWWHGWKDW
,Q %RUGHQNLUFKHU WKH &RXUW KHOG WKDW WKHUH ZDV QR 'XH             KHDQGDFRGHIHQGDQWSODQQHGDQGH[HFXWHGWKHUREEHU\WKDW
3URFHVV YLRODWLRQ ZKHUH WKH SURVHFXWRU UHLQGLFWHG WKH                 KHZLHOGHGDSHOOHWJXQDQGRUGHUHGWKHEDQNPDQDJHUWRJHW
GHIHQGDQW RQ PRUH VHULRXV FKDUJHV LQ UHVSRQVH WR WKH                WKHPRQH\DQGWKDWKHKDGVWROHQWKHJHWDZD\FDUDQGOLFHQVH
GHIHQGDQWjV GHFLVLRQ QRW WR SOHDG JXLOW\  7KH SURVHFXWRU           SODWHLQSUHSDUDWLRQIRUWKHUREEHU\%DQG\)GDW
                                                                            +LVFRGHIHQGDQWVWHVWLILHGWKDW%DQG\KDGUHFUXLWHGWKHPWR
                                                                            UREWKHEDQNSURYLGHGWKHZHDSRQVDQGPDGHWKHPIROORZ
                                                                            WKURXJKZLWKWKHFULPHZKHQWKH\VKRZHGUHOXFWDQFHWRGRVR
     
      $FFRUGLQJ WR WKH JRYHUQPHQW 7XIQHOO VWLOO SOHG JXLOW\ WR EHLQJ D     ,G,Q3DUNHUWKHGHIHQGDQWjVDFFRPSOLFHVWHVWLILHGWKDWKH
IHORQ LQ SRVVHVVLRQ RI D ILUHDUP
    8QLWHG6WDWHVY'XSUHH                             1R        1R                       8QLWHG6WDWHVY'XSUHH        

  UROH RI OHDGHU  ,W ZDV &ORSWRQjV YDQ XVHG IRU WKH            DGPLWWHGKHKDGPDGHWKLVWKUHDWGXULQJSOHDQHJRWLDWLRQVDQG
  UREEHU\&ORSWRQWRRNWKHJXQVDIWHUWKHUREEHU\DQG                 WKHGHIHQGDQWjVFRQYLFWLRQRQWKHPRUHVHYHUHFKDUJHUHVXOWHG
  &ORSWRQFRQWUROOHGWKHPRQH\IURPWKHUREEHU\                         LQDPDQGDWRU\OLIHVHQWHQFH,GDW7KLVFRXUWKDV
                                                                             VXPPDUL]HG%RUGHQNLUFKHUDVKROGLQJmWKDWDFWXDOUHWDOLDWRU\
'XSUHHWKXVFRQWHQGVWKDWWKHGLVWULFWFRXUWPLVDSSOLHGWKH                  EHKDYLRU LV DFFHSWDEOH DW OHDVW LQ WKH SOHD EDUJDLQLQJ
IDFWRUV UHFRJQL]HG E\ WKLV FRXUW DV UHOHYDQW WR GHWHUPLQLQJ          FRQWH[Wl8QLWHG6WDWHVY$QGUHZV)GWK
ZKHWKHUWKH%HQKDQFHPHQWDSSOLHVZKLFKLQFOXGHmWKH                  &LUVHHDOVR6XDUH])GDWmSURVHFXWRULDO
GHIHQGDQWjV H[HUFLVH RI GHFLVLRQPDNLQJ DXWKRULW\ DQ\                  YLQGLFWLYHQHVV FDQ SRWHQWLDOO\ EH IRXQG LQ WKH SUHWULDO
UHFUXLWPHQWRIDFFRPSOLFHVWKHFODLPHGULJKWWRDODUJHUVKDUH              DGGLWLRQRIFKDUJHVIROORZLQJSUHWULDODVVHUWLRQVRISURWHFWHG
RI WKH IUXLWV RI WKH FULPH WKH GHJUHH RI SDUWLFLSDWLRQ LQ         ULJKWV  +RZHYHU LI WKH FKDUJHV DUH EURXJKW VLPSO\ DV WKH
SODQQLQJWKHRIIHQVHDQGWKHGHJUHHRIFRQWUROWKHGHIHQGDQW                UHVXOWRIIDLOXUHRIWKHSOHDEDUJDLQLQJSURFHVVWKH\DUHQRW
H[HUFLVHGRYHURWKHUVl8QLWHG6WDWHVY9DQGHEHUJ)G                YLQGLFWLYHlFLWDWLRQVRPLWWHG*LYHQWKHIDFWWKDW'XSUHH
WK&LULQWHUQDOTXRWDWLRQPDUNVRPLWWHG                 KDVQRWHYHQDOOHJHGWKHDGGLWLRQRIQHZFKDUJHVIROORZLQJKLV
                                                                             GHFLVLRQ WR JR WR WULDO KLV DUJXPHQWV RQ WKLV LVVXH DUH
   7KH EXUGHQ LV RQ WKH JRYHUQPHQW WR SURYH E\ D                   XQDYDLOLQJ
SUHSRQGHUDQFHRIWKHHYLGHQFHWKDWDSDUWLFXODUVHQWHQFLQJ
HQKDQFHPHQWDSSOLHV8QLWHG6WDWHVY0DUWLQH])G                    ( 6HQWHQFH(QKDQFHPHQWV
WK&LUm'HWHUPLQLQJWKHQDWXUHDQGH[WHQW
RIWKH UROH >'XSUHH@SOD\HGLQWKHRIIHQVHHQWDLOVDIDFWXDO                    7DNLQJRID:HDSRQ
LQTXLU\ZKLFKZHUHYLHZRQO\IRUFOHDUHUURUl8QLWHG6WDWHV
Y%ODQGIRUG)GWK&LU86&                      %HFDXVHWKHUREEHUVWRRNWKHDUPRUHGFDUJXDUGjVZHDSRQ
HVWDWHVWKDWZHVKRXOGJLYHmGXHGHIHUHQFHWRWKH                   IURP KLP GXULQJ WKH UREEHU\ WKH GLVWULFW FRXUW DSSOLHG WKH
GLVWULFWFRXUWjVDSSOLFDWLRQRIWKHJXLGHOLQHVWRWKHIDFWVl7KH           HQKDQFHPHQWHQXQFLDWHGLQ%ERIWKH6HQWHQFLQJ
JRYHUQPHQW DFNQRZOHGJHV WKH IDFWRUV ZKLFK LQIRUP WKH                   *XLGHOLQHV m,I D ILUHDUP GHVWUXFWLYH GHYLFH RU FRQWUROOHG
GHWHUPLQDWLRQRIZKHWKHUWKHHQKDQFHPHQWLVDSSOLFDEOHDQG                  VXEVWDQFH ZDV WDNHQ RU LI WKH WDNLQJ RI VXFK LWHP ZDV DQ
FLWHVWKHGLVWULFWFRXUWjVILQGLQJVWKDW'XSUHHILUVWVXJJHVWHG              REMHFWRIWKHRIIHQVHLQFUHDVHE\OHYHOl'XSUHHFKDOOHQJHV
WKH UREEHU\ IXUQLVKHG WKH JXQ XVHG GHWHUPLQHG ZKHQ WKH             WKLVHQKDQFHPHQWE\QRWLQJWKHXQGLVSXWHGIDFWWKDWKHGLGQRW
DUPRUHGWUXFNZRXOGDUULYHPRYHGWKHVXUYHLOODQFHFDPHUDV                  DFWXDOO\WDNHWKHZHDSRQIURPWKHJXDUGDQGDUJXLQJZLWKRXW
DQGVLJQDOHG WR 7XIQHOO DQG &ORSWRQ ZKHQ WKH WUXFN ZDV             DXWKRULW\RUHODERUDWLRQWKDWm>F@DVHODZGRHVQRWVXSSRUWWKH
ODWH   7KH JRYHUQPHQW DOVR FLWHV VHYHUDO FDVHV ZKLFK LW            FRXUW VFRULQJ WKLV IDFWRU  7KHUH LV QR HYLGHQFH WKDW WKH
FRQWHQGVFRPSHODSSOLFDWLRQRIWKLVHQKDQFHPHQWWR'XSUHH                   $SSHOODQWKDGDQ\UHDVRQWREHOLHYHWKDWDZHDSRQZRXOGEH
6HH HJ 8QLWHG 6WDWHV Y %DQG\  )G  WK &LU          WDNHQIURPWKHJXDUGl$FWVFRPPLWWHGLQIXUWKHUDQFHRID
                                                                             MRLQWFULPLQDOHQWHUSULVHZKLFKDUHUHDVRQDEO\IRUHVHHDEOHFDQ
                                                                             EH DWWULEXWHG WR DOO LQGLYLGXDOV LQYROYHG LQ WKH HQWHUSULVH
     
                                                                             8QLWHG 6WDWHV Y 3DWWRQ 1RV   
        7KLV ODVW ILQGLQJ LV VXSSRUWHG E\ 7XIQHOOjV WHVWLPRQ\ WKDW KH DQG    :/DWWK&LU2FWFLWLQJ866*
&ORSWRQ DUULYHG DW 9DOXH &LW\ DURXQG QRRQ RQ WKH GD\ RI WKH UREEHU\ DQG      %:KHWKHUDFRFRQVSLUDWRUjVDFWLRQVZHUHUHDVRQDEO\
ZDLWHG LQ WKH SDUNLQJ ORW IRU WKH DUPRUHG WUXFN WR SXOO XS 7XIQHOO VWDWHG   IRUHVHHDEOH LV D IDFWXDO ILQGLQJ UHYLHZHG IRU FOHDU HUURU
WKDW DW RQH SRLQW 'XSUHH FDPH RXW RI WKH IURQW RI WKH VWRUH ORRNHG LQ
WKHLU GLUHFWLRQ DQG mWKUHZ KLV KDQGV XS OLNH µ, GRQjW NQRZ ZKHUH WKH\jUH    8QLWHG6WDWHVY7LVGDOH)GWK&LU
DW EXW LWjV VWLOO D JRjl 'XSUHH WKHQ ZHQW EDFN LQWR WKH VWRUH &ORSWRQ
WHVWLILHG WKDW WKH DUPRUHG WUXFN DUULYHG DIWHU  SP
     8QLWHG6WDWHVY'XSUHH                             1R        1R                      8QLWHG6WDWHVY'XSUHH      

  7KHGLVWULFWFRXUWPDGHWKHIROORZLQJILQGLQJVLQUHODWLRQWR                 )LUVW0U'XSUHHZDVDSHUVRQZKRILUVWVXJJHVWHGWKH
WKLVHQKDQFHPHQW                                                               UREEHU\6HFRQGKHIXUQLVKHGWKHJXQIRUWKHUREEHU\
                                                                                7KLUG KH GHWHUPLQHG WKH WLPH WKDW WKH UREEHU\ ZRXOG
  0U 'XSUHH NQHZ WKDW WKH DUPRUHG FDU JXDUGV ZHUH                      RFFXU WKDW LV ZKHQ WKH DUPRUHG FDU ZRXOG DUULYH
  DUPHGZKHQWKH\ZHQWLQWR9DOXH&LW\+HJDYHKLVJXQ                        )RXUWKKHPRYHGWKHFDPHUDV)LIWKKHVLJQDOHGWRKLV
  WR 0U 7XIQHOO ZKR PXVW EH D WKXJ E\ DQ\ERG\jV                      FRFRQVSLUDWRUVWKDWKHGLGQRWNQRZZK\WKHWUXFNKDG
  GHVFULSWLRQ,WZDVFHUWDLQO\IRUHVHHDEOHE\0U'XSUHH                      QRWDUULYHG,QRWKHUZRUGVLWjVKDUGWRWHOO,WKLQNo,
  WKDW0U7XIQHOODQG5HJLQDOG&ORSWRQZRXOGGLVDUPWKH                        WKLQN D JRRG DUJXPHQW FRXOG EH PDGH WKDW KH ZDV D
  DUPRUHGFDUJXDUG                                                        OHDGHU+HFHUWDLQO\RUFKHVWUDWHGLWLQWKHVHQVHWKDWKH
                                                                                IXUQLVKHGWKHLGHDWKHZHDSRQDQGWKHVSHFLILFWLPLQJRI
$VLGHIURPWKHEDUHDVVHUWLRQWKDW'XSUHHKDGQRUHDVRQWR                      WKHUREEHU\0D\EHWKDWDGGVXSWREHLQJDOHDGHUWRR
EHOLHYHWKDWWKHJXDUGjVZHDSRQZRXOGEHWDNHQ'XSUHHGRHV                     EXW,GRQjWNQRZWKDW,KDYHWRUHDOO\JRWKDWIDU
QRWFRQWHVWWKHGLVWULFWFRXUWjVILQGLQJVRIIDFW*LYHQWKHIDFW
WKDWWKHUREEHUVNQHZWKHDUPRUHGFDUJXDUGZRXOGEHDUPHG                   'XSUHHFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGLQDSSO\LQJWKLV
DQGFDUULHGDJXQLQFDVHWKH\ZHUHXQVXFFHVVIXOLQGLVDUPLQJ                 HQKDQFHPHQW RYHU LWV RZQ UHFRJQLWLRQ WKDW mWKH
KLPWKHGLVWULFWFRXUWjVILQGLQJWKDWWKHWDNLQJRIWKHJXDUGjV              SUHSRQGHUDQFH RI WKH HYLGHQFH ZRXOG >QRW@ VXSSRUW D
ZHDSRQZDVUHDVRQDEO\IRUHVHHDEOHLVQRWFOHDUO\HUURQHRXV                   FRQFOXVLRQWKDW0U'XSUHHZDVDOHDGHURIWKHUREEHU\LQWKH
                                                                              ZD\WKDWWHUPLVRUGLQDULO\XVHGLQ(QJOLVKSDUODQFHl7KH
        5ROHDV2UJDQL]HURU/HDGHU                                         FRXUW DOVR FRPPHQWHG WKDW LWV mFRQFOXVLRQV UHJDUGLQJ WKH
                                                                              WHVWLPRQ\LVWKDWWKH\DOOVHHPHGWREHLQLWWRJHWKHU'XSUHH
   3XUVXDQWWR%FRIWKH6HQWHQFLQJ*XLGHOLQHVWKH                   7XIQHOODQG&ORSWRQ$QGLWLVGLIILFXOWWRVD\ZKRUHDOO\ZDV
GLVWULFWFRXUWHQKDQFHG'XSUHHjVVHQWHQFHE\WZROHYHOVXSRQ                  WKHOHDGHUl
ILQGLQJ WKDW KH ZDV DQ RUJDQL]HU OHDGHU PDQDJHU RU
VXSHUYLVRU  7KH FRXUW EDVHG WKLV HQKDQFHPHQW RQ WKH                     7KHVH UHPDUNV SUHIDFHG WKH FRXUWjV HQXPHUDWLRQ RI LWV
IROORZLQJIDFWXDOILQGLQJV                                                   IDFWXDO ILQGLQJV VXSSRUWLQJ WKH HQKDQFHPHQW ZLWK ZKLFK
                                                                              'XSUHHDOVRWDNHVLVVXH6SHFLILFDOO\'XSUHHFLWHV7XIQHOOjV
                                                                              RZQWHVWLPRQ\DWWULDOZKHQLQUHVSRQVHWRDTXHVWLRQDERXW
                                                                              ZKHQKHILUVWGLVFXVVHGFRPPLWWLQJDUREEHU\DW9DOXH&LW\
     
                                                                              ZLWK'XSUHH7XIQHOOUHFRXQWHGWKDWm>Z@KHQZHILUVWVWDUWHG
       7XIQHOO WHVWLILHG WKDW KH GLG QRW RZQ D JXQ EHFDXVH KH ZDV D           WDONLQJDQGKHVDLGKHXVHGWREHD%ULQNVWUXFNGULYHU,VDLG
FRQYLFWHG IHORQ &ORSWRQ WHVWLILHG WKDW KH 7XIQHOO DQG 'XSUHH GLVFXVVHG     WKDWLWZRXOGEHDGUHDPWRJRURED%ULQNVWUXFNDUPRUHG
WKH SRVVLELOLW\ WKDW WKH\ PLJKW QRW EH DEOH WR JHW WKH DUPRUHG FDU JXDUGjV    WUXFNZLWKDOOWKHPRQH\DQGVWXII$QGWKHFRQYHUVDWLRQMXVW
JXQ GXULQJ WKH UREEHU\ DQG FRQFOXGHG WKDW WKH\ ZRXOG QHHG D JXQ mMXVW
LQ FDVH VKRWV ZHUH ILUHGl 7XIQHOO UHFRXQWHG WKDW KH REWDLQHG D QLQH          ZHQWRQIURPWKHQl&ORSWRQZKHQDVNHGWRGHVFULEHKRZ
PLOOLPHWHU VHPLDXWRPDWLF SLVWRO IURP 'XSUHH WKRXJK LW ZDV LQLWLDOO\         WKHFRQYHUVDWLRQDERXWUREELQJ9DOXH&LW\ILUVWJRWVWDUWHG
XQORDGHG 7XIQHOO ODWHU DVNHG IRU WKH FOLS WR WKH JXQ ZKLFK 'XSUHH OHIW DW   UHVSRQGHG WKDW m>L@W DFWXDOO\ VWDUWHG ZLWK %ULDQ 7XIQHOOl
7XIQHOOjV DSDUWPHQW &ORSWRQ WHVWLILHG WKDW DIWHU WKH UREEHU\ KH KLG         :LWKRXWVSHFLILFFLWDWLRQ'XSUHHDOVRDVVHUWVWKDW
'XSUHHjV JXQ EHKLQG WKH UHVWDXUDQW DQG 'XSUHH UHWULHYHG LW DORQJ ZLWK
 RI WKH SURFHHGV IURP WKH UREEHU\ ODWHU WKDW QLJKW &ORSWRQ DOVR          3XUVXDQWWR7XIQHOOjVWHVWLPRQ\LWZDV7XIQHOOjVLGHDWR
VWDWHG WKDW DIWHU KH ZDV DUUHVWHG KH WROG WKH )%, ZKHUH 'XSUHH NHSW KLV
JXQ 7KH )%, DQG ORFDO SROLFH UHFRYHUHG WKH QLQH PLOOLPHWHU VHPL               UREWKHJXDUGDQG7XIQHOOWROG&ORSWRQZKRVWDWHGWKDWKH
DXWRPDWLF SLVWRO IURP 'XSUHHjV UHVLGHQFH LQ WKH SODFH &ORSWRQ KDG              ZRXOGKDYHWRFDOO'XSUHH7KHQ&ORSWRQDVVXPHGWKH
VSHFLILHG ZKHQ WKH\ ODWHU H[HFXWHG D VHDUFK ZDUUDQW
