       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


$11$%(//( /(**                   ;
        3ODLQWLII$SSHOODQW      
                                   
                                     1R
           Y                      
                                    !
                                   
'5 $6+ &+235$                    
                   'HIHQGDQW 
                                   
81,9(56,7< 852/2*< 3&          
          'HIHQGDQW$SSHOOHH 
                                   
                                   
                                   
                                 1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
   IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW.QR[YLOOH
    1RnsDPHV+sDUYLV'LVWULFWsXGJH
               $UJXHGsDQXDU\
           'HFLGHGDQG)LOHG$SULO
%HIRUH68+5+(,15,&+6,/(5DQG%$7&+(/'(5
                 &LUFXLWsXGJHV




                            
     /HJJY&KRSUDHWDO                         1R

                     BBBBBBBBBBBBBBBBB
                           &2816(/
$5*8('7LPRWK\:0F$IHH0&$)((/$:),50
1RUWRQ 9LUJLQLD IRU $SSHOODQW  sHIIUH\ $ :RRGV
125721 	 /8+1 .QR[YLOOH 7HQQHVVHH IRU $SSHOOHH
21%5,()7LPRWK\:0F$IHH0&$)((/$:),50
1RUWRQ 9LUJLQLD IRU $SSHOODQW  sHIIUH\ $ :RRGV
5 )UDQNOLQ 1RUWRQ 125721 	 /8+1 .QR[YLOOH
7HQQHVVHHIRU$SSHOOHH
                     BBBBBBBBBBBBBBBBB
                         23,1,21
                     BBBBBBBBBBBBBBBBB
   68+5+(,15,&+&LUFXLWsXGJH3ODLQWLII$QQDEHOOH/HJJ
DSSHDOVIURPWKHRUGHUVRIWKHGLVWULFWFRXUWJUDQWLQJVXPPDU\
MXGJPHQW WR 'HIHQGDQW 8QLYHUVLW\ 8URORJ\ 3& DQG
GHQ\LQJ 3ODLQWLIIjV PRWLRQ WR YDFDWH MXGJPHQW LQ IDYRU RI
'HIHQGDQWLQWKLVPHGLFDOPDOSUDFWLFHGLYHUVLW\DFWLRQ:H
KROGWKDW3ODLQWLIIjVPHGLFDOH[SHUWWHVWLPRQ\ZDVSURSHUO\
H[FOXGHGDVIDLOLQJWRPHHWWKHUHTXLUHPHQWVRI7HQQ&RGH
$QQEZKLFKGLFWDWHVZKRPD\EHDFFHSWHGDV
D PHGLFDO H[SHUW LQ D PHGLFDO PDOSUDFWLFH DFWLRQ XQGHU
7HQQHVVHHODZ:HUHMHFW3ODLQWLIIjVDUJXPHQWWKDW
ELVWUXPSHGE\)HGHUDO5XOHRI(YLGHQFHEHFDXVH
WKH7HQQHVVHHVWDWXWHLVDUXOHRIZLWQHVVFRPSHWHQF\DQGDV
VXFKDSSOLHVLQIHGHUDOFLYLOSURFHHGLQJVSXUVXDQWWR)HGHUDO
5XOHRI(YLGHQFH)XUWKHUPRUHZHVHHQRFRQIOLFWLQ
JLYLQJHIIHFWWRERWK5XOHDQG5XOH
                               ,
  2Q$XJXVW$QQDEHOOH/HJJXQGHUZHQWF\VWRFHOH
UHSDLUVXUJHU\DWWKH8QLYHUVLW\RI7HQQHVVHH0HGLFDO&HQWHU
WRUHPRYHDF\VWIURPWKHLQWHULRUZDOORI/HJJjVYDJLQDDQG
WR FUHDWH D VOLQJ WR VXSSRUW KHU EODGGHU  'U &KRSUD DQ
HPSOR\HHRI8QLYHUVLW\8URORJ\3&SHUIRUPHGWKHVXUJHU\
3ODLQWLIIDOOHJHGWKDWGXULQJWKHVXUJHU\VKHVXIIHUHGPDMRU
1R                          /HJJY&KRSUDHWDO        

EORRGORVVUHVXOWLQJLQIRXUEORRGWUDQVIXVLRQV'U&KRSUD
SODFHG SDFNLQJ LQWR WKH DUHD EXW 3ODLQWLII DOOHJHG WKDW VKH
FRQWLQXHGWRVXIIHUEORRGORVV3ODLQWLIIZDVWKHQKRVSLWDOL]HG
IRUIRXUGD\VDIWHUWKHVXUJHU\WRRNSODFH
  'U&KRSUDUHPRYHGWKHSDFNLQJRQ$XJXVWEXW
WKHEORRGORVVFRQWLQXHG'U&KRSUDUHSODFHGWKHSDFNLQJ
DJDLQRQ$XJXVW3ODLQWLIIUHSRUWHGZHDNQHVVDQG
SHUVLVWHQW EOHHGLQJ WR 'U &KRSUD  2Q $XJXVW  
'U &KRSUD UHOHDVHG 3ODLQWLII IURP WKH KRVSLWDO  3ODLQWLII
FRQWLQXHGWRKDYHVHYHUHSUREOHPVZLWKEOHHGLQJKRZHYHU
6RRQ DIWHU 3ODLQWLIIjV UHOHDVH 'U &KRSUD PRYHG IURP
7HQQHVVHHWR&DOLIRUQLD
  2Q $XJXVW   DQRWKHU HPSOR\HH RI 8QLYHUVLW\
8URORJ\ 'U 3DXO +DWFKHU UHPRYHG WKH SDFNLQJ  2Q
6HSWHPEHU   3ODLQWLII WUDYHOHG WR /RQHVRPH 3LQH
+RVSLWDOLQ%LJ6WRQH*DS9LUJLQLDZKHUHVKHZDVVHHQE\
'U5REHUWVLQWKHHPHUJHQF\URRP'U5REHUWVFRQWDFWHG
'U+DWFKHUZKRDVNHG5REHUWVWRUHSDFNWKHVXUJHU\VLWHDQG
WRLQVWUXFWWKHSODLQWLIIWRUHWXUQWR'U+DWFKHUjVRIILFHWKH
QH[WGD\
  2Q 6HSWHPEHU   'U +DWFKHU UHSODFHG 3ODLQWLIIjV
SDFNLQJ3ODLQWLIIKDGEOHGWKURXJKWKHSDFNLQJE\DP
WKDWPRUQLQJDQGKDGDKLJKIHYHUDQGFKLOOV7KDWSDFNLQJ
ZDVUHPRYHG'U+DWFKHULQVWUXFWHG3ODLQWLIIWRUHWXUQRQ
6HSWHPEHUWRVHH'U)UHGHULFN.OHLQZKRZDVDOVR
DQHPSOR\HHRI8QLYHUVLW\8URORJ\
   3ODLQWLIIUHWXUQHGRQ6HSWHPEHUDQGZDVH[DPLQHG
E\'U.OHLQ+HUHFRPPHQGHGWKDWVXUJHU\EHFRQGXFWHG
LPPHGLDWHO\ WR DVFHUWDLQ WKH FDXVH RI WKH EOHHGLQJ  $IWHU
SHUIRUPLQJWKHVXUJHU\'U.OHLQGHWHUPLQHGWKDWWKHVXUJHU\
VLWHKDGHLWKHUQRWEHHQVXWXUHGRUWKDWWKHVXWXUHVKDGFRPH
ORRVH
       /HJJY&KRSUDHWDO                       1R       1R                            /HJJY&KRSUDHWDO     

   2Q $XJXVW   3ODLQWLII EURXJKW WKLV PHGLFDO           PRWLRQV IRU UHOLHI XQGHU ERWK 5XOH  DQG 5XOH  IRU DQ
PDOSUDFWLFH DFWLRQ DJDLQVW 'U &KRSUD DQG 8QLYHUVLW\            DEXVH RI GLVFUHWLRQ %DUQHV  )G DW  5XOH H
8URORJ\3&7KHGLVWULFWFRXUWJUDQWHGVXPPDU\MXGJPHQW             $EUDKDPVHQY7UDQV6WDWH([S,QF)GWK
WR'HIHQGDQWVKROGLQJWKDW3ODLQWLIIIDLOHGWRFUHDWHDQLVVXH        &LU5XOH
RIIDFWWKDW'HIHQGDQWVIHOOEHORZWKHVWDQGDUGRIFDUH,QVR
UXOLQJWKHGLVWULFWFRXUWUHIXVHGWRFRQVLGHUWKHWHVWLPRQ\RI          /HJJ FRQWHQGHG EHIRUH WKH GLVWULFW FRXUW WKDW VKH VKRXOG
3ODLQWLIIjVPHGLFDOH[SHUW'U%HUQDUG0LWWHPH\HUZKRLV             KDYH EHHQ JLYHQ PRUH WLPH WR ORFDWH DQ H[SHUW ZLWQHVV
OLFHQVHGWRSUDFWLFHLQ7H[DVDQGWKHUHIRUHIDLOHGWRVDWLVI\         EHFDXVH m>D@W WKH WLPH WKH 'HIHQGDQW ILOHG LWV 0RWLRQ IRU
WKHUHTXLUHPHQWVRIEZKLFKUHTXLUHVWKDWWKH            6XPPDU\sXGJPHQWWKHGLVFRYHU\GHSRVLWLRQVRIWKHDJHQWV
H[SHUWEHOLFHQVHGWRSUDFWLFHmLQWKHVWDWHRU D FRQWLJXRXV         RIWKH'HIHQGDQWKDGMXVWEHHQFRPSOHWHG&RXQVHOIRUWKH
ERUGHU VWDWHl  7KH FRXUW IXUWKHU KHOG WKDW 0LWWHPH\HUjV       3ODLQWLII KDG QRW HYHQ UHFHLYHG D FRS\ RI WKH VLJQHG
DIILGDYLWZDVRWKHUZLVHLQVXIILFLHQWWRFUHDWHDJHQXLQHLVVXH         GHSRVLWLRQVRI'U&KRSUDDQG'U+DWFKHUl /HJJIXUWKHU
RIIDFWXQGHU)HG5&LY3H)LQDOO\WKHGLVWULFWFRXUW      DUJXHVWKDWXQWLOWKHVHGHSRVLWLRQVZHUHDYDLODEOHLWZRXOGEH
GHQLHG3ODLQWLIIjVPRWLRQWRZDLYHWKHUHTXLUHPHQWVRI           GLIILFXOWWRHQOLVWDQH[SHUWZLWQHVV
E7KHUHDIWHU3ODLQWLIIPRYHGWRYDFDWHMXGJPHQWWR
JLYHKHUDGGLWLRQDOWLPHWRREWDLQDTXDOLI\LQJH[SHUW7KH             7KLVDUJXPHQWLVZLWKRXWPHULW/HJJVKRXOGKDYHEHHQ
GLVWULFW FRXUW GHQLHG WKH PRWLRQ EHFDXVH 3ODLQWLII IDLOHG WR   VHDUFKLQJIRUDQH[SHUWDWWKHRXWVHWLQRUGHUWRSURSHUO\PHHW
PHHWWKHVWDQGDUGVVHWRXWLQ5XOHWRMXVWLI\UHOLHI7KLV        KHUEXUGHQRISURRIXQGHU7HQQ&RGH$QQ
DSSHDOIROORZV                                                        )XUWKHU/HJJjVDUJXPHQWLVUHDOO\DPRWLRQWRUHFRQVLGHUQRW
                                                                       DPRWLRQXQGHU)HG5&LY3RUE7KXVWKHGLVWULFW
                                 ,,                                   FRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQGHQ\LQJWKHPRWLRQ
   :HUHYLHZWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\MXGJPHQW                                             (
GHQRYR+DUWVHOY.H\V)GWK&LU
6XPPDU\ MXGJPHQW LV DSSURSULDWH mLI WKH SOHDGLQJV                  /DVWO\/HJJDOOHJHVWKDWWKHUHVWULFWLYHODQJXDJHRI7HQQ
GHSRVLWLRQV DQVZHUV WR LQWHUURJDWRULHV DQG DGPLVVLRQV RQ       &RGH$QQELVXQFRQVWLWXWLRQDO6SHFLILFDOO\
ILOHWRJHWKHUZLWKWKHDIILGDYLWVLIDQ\VKRZWKDWWKHUHLVQR      VKH FODLPV WKDW WKH VWDWH VWDWXWH YLRODWHV KHU FRQVWLWXWLRQDO
JHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWDQGWKDWWKHPRYLQJSDUW\        ULJKW WR GXH SURFHVV DQG HTXDO SURWHFWLRQ EHFDXVH LW WUHDWV
LVHQWLWOHGWRDMXGJPHQWDVDPDWWHURIODZl)HG5&LY3        YLFWLPV RI PHGLFDO PDOSUDFWLFH LQ GLIIHUHQW ZD\V  7KLV
F                                                               DUJXPHQWZDVQRWPDGHEHORZDQGLVWKHUHIRUHIRUIHLWHGRQ
                                                                       DSSHDO6HH)RVWHUY%DULORZ)GWK&LU
                                 $                                    5HJDUGOHVVLWLVZLWKRXWPHULW6HH6XWSKLQY3ODWW
                                                                        6:G   7HQQ  KROGLQJ WKDW WKH
  )LUVW 3ODLQWLII DUJXHV WKDW WKH GLVWULFW FRXUW PLVWDNHQO\    JHRJUDSKLF OLPLWDWLRQ RI  E LV FRQVWLWXWLRQDO
DSSOLHG)HG5(YLGDQGVWDWHODZDQGQRW)HG5(YLG         XQGHUDUDWLRQDOEDVLVWHVW5DOSKE\5DOSKY1DJ\)
 LQ GHFLGLQJ WKH HYLGHQWLDU\ TXHVWLRQ RI ZKHWKHU KHU       6XSSDWFRQVWLWXWLRQDOXQGHUGXHSURFHVVDQGHTXDO
H[SHUWZDVTXDOLILHGWRUHQGHUDQRSLQLRQ3ODLQWLIIIXUWKHU          SURWHFWLRQFODXVHV
FRQWHQGVWKDW7HQQ&RGH$QQEFRQIOLFWVZLWK
                                                                                                       ,,,
    
     &KRSUD ZDV YROXQWDULO\ GLVPLVVHG RQ 0DUFK  
                                                                         7KHMXGJPHQWRIWKHGLVWULFWFRXUWLV$)),50('
    /HJJY&KRSUDHWDO                        1R       1R                          /HJJY&KRSUDHWDO         

RQ5RVHY+&$+HDOWK6HUYRI7HQQ,QF6:G         'DXEHUWY0HUULOO'RZ3KDUP,QF86
7HQQ &W $SS  ZKLFK KHOG WKDW FRXQVHOjV HIIRUW WR   DQGSURJHQ\
UHWDLQDQH[SHUWLQ7HQQHVVHHRUDFRQWLJXRXVVWDWHGHVSLWHWKH
IDFWWKDWWKHSODLQWLIIKDGFRQWDFWHGGRFWRUVLQWZR7HQQHVVHH           ,QIHGHUDOGLYHUVLW\DFWLRQVVWDWHODZJRYHUQVVXEVWDQWLYH
FLWLHVXVHGDSURIHVVLRQDOZLWQHVVORFDWRUDQGDOVRWULHGWR        LVVXHVDQGIHGHUDOODZJRYHUQVSURFHGXUDOLVVXHV(ULH55
HQOLVWRWKHUGRFWRUVWR EHOLVWHGDVH[SHUWV6HHLGDW       &RY7RPSNLQV865XOHVRIHYLGHQFHDUH
7KH 7HQQHVVHH&RXUWRI$SSHDOVVXSSRUWHGLWVGHFLVLRQE\             GHHPHGUXOHVRISURFHGXUH&KDUOHV$ODQ:ULJKW	$UWKXU
OLVWLQJ IURP WKH GHIHQGDQWjV DIILGDYLW WKH QXPEHU RI           50LOOHUGHG6DODVE\6DODVY:DQJ
SK\VLFLDQVLQ7HQQHVVHHDQGFRQWLJXRXVVWDWHV6HHLGDW        )GG&LUDQGWKHUHIRUHWKH)HGHUDO
OLVWLQJLQWKHWKRXVDQGVWKHQXPEHURIGRFWRUVLQ7HQQHVVHH        5XOHVRI(YLGHQFHUDWKHUWKDQVWDWHHYLGHQWLDU\ODZVDUHKHOG
DQGFRQWLJXRXVVWDWHV                                               WRDSSO\LQIHGHUDOGLYHUVLW\SURFHHGLQJV%DUQHVY2ZHQV
                                                                      &RUQLQJ)LEHUJODV&RUS)GWK&LU
   /HJJFRPSODLQVWKDWWKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQ       *URVVKHLPY)UHLJKWOLQHU&RUS)GWK&LU
EHFDXVHVKHPDGHWKHIROORZLQJHIIRUWVDVDUWLFXODWHGLQKHU         /DQH\Y&HORWH[&RUS)GWK&LU
DWWRUQH\jVDIILGDYLW)LUVWRQ$XJXVWFRXQVHOKDG         ,QGHHGWKHIHGHUDOUXOHVWKHPVHOYHVSURYLGHWKDWWKH\
KLVUHVHDUFKDQDO\VW.HQ%HUU\VHDUFKIRUDQH[SHUW%HUU\         mDSSO\JHQHUDOO\WRFLYLODFWLRQVDQGSURFHHGLQJVl)HG5
IRXQG RQO\ D VLQJOH H[SHUW ZKRP FRXQVHO FRQWDFWHG  7KH     (YLGE)XUWKHUWKLV&RXUWKDVFDWHJRULFDOO\VWDWHG
H[SHUW ZDV XQZLOOLQJ WR WHVWLI\ EHFDXVH KH ZDV DFTXDLQWHG     WKDW m>W@KH DGPLVVLELOLW\ RI H[SHUW WHVWLPRQ\ LV D PDWWHU RI
ZLWK'U&KRSUD1H[WLQ1RYHPEHUFRXQVHOFRQWDFWHG           IHGHUDOUDWKHUWKDQVWDWHSURFHGXUHl%URRNVY$P%URDG
D UHIHUUDO VHUYLFH DQG ZDV JLYHQ WKH QDPH RI D GRFWRU LQ   &RV)GWK&LU
0DU\ODQG  &RXQVHO ZURWH DQG FDOOHG QXPHURXV WLPHV EXW
UHFHLYHGQRUHVSRQVH,Q)HEUXDU\DQG0DUFKFRXQVHO               +RZHYHU VRPH VWDWH HYLGHQWLDU\ UXOHV KDYH VXEVWDQWLYH
FRQWDFWHGDXURORJLFSUDFWLFHLQ.LQJVSRUW7HQQHVVHHDQGD           DVSHFWVWKHUHE\GHI\LQJWKHVXEVWDQFHSURFHGXUHGLVWLQFWLRQ
XURORJLFSUDFWLFHLQ1DVKYLOOH7HQQHVVHH&RXQVHOUHFHLYHG          DQGFUHDWLQJDSRWHQWLDO(ULHFRQIOLFW6HHHJ&0,7UDGLQJ
QRUHVSRQVHIURPHLWKHUSUDFWLFH$IWHUWKLVSRLQWFRXQVHO          ,QFY4XDQWXP$LU,QF)GWK&LU
FRQWDFWHG'U0LWWHPH\HU                                             KROGLQJWKDWDOWKRXJKWKHSDUROHYLGHQFHUXOHUHODWHVWRWULDO
                                                                      SURFHGXUHLWLVVXEVWDQWLYHLQQDWXUHVHHDOVR8QJHUOHLGHUY
   ,WFDQQRWEHVDLGWKDWWKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQ   *RUGRQ)GWK&LUVDPH6WDWH
6HH$\HUVE\$\HUVY5XWKHUIRUG+RVS,QF6:G             ZLWQHVV FRPSHWHQF\ UXOHV DUH RIWHQ LQWLPDWHO\ LQWHUWZLQHG
7HQQ&W$SS&RXQVHOjVDIILGDYLWUHYHDOV          ZLWK D VWDWH VXEVWDQWLYH UXOH  7KLV LV HVSHFLDOO\ WUXH ZLWK
OLPLWHGFRQWDFWVLQWKHQLQHPRQWKSHULRGVXEVHTXHQWWRWKH           PHGLFDO PDOSUDFWLFH VWDWXWHV EHFDXVH H[SHUW WHVWLPRQ\ LV
ILOLQJRIWKHFRPSODLQW,QWKHDEVHQFHRILQIRUPDWLRQRQWKH        XVXDOO\UHTXLUHGWRHVWDEOLVKWKHVWDQGDUGRIFDUH6HH3HFNY
QXPEHU RI XURORJLVWV DYDLODEOH LQ 7HQQHVVHH DQG WKH            7HJWPH\HU)6XSS:'9Dm,QRWKHU
FRQWLJXRXVVWDWHVZHFDQQRWVD\WKDWWKHGLVWULFWFRXUWHUUHG        ZRUGVXQGHUWKHVWDWXWRU\VFKHPHWKHVWDQGDUGRIFDUHLVWKDW
LQGHQ\LQJWKHZDLYHU                                                ZKLFK LV WHVWLILHG WR E\ DQ H[SHUW TXDOLILHG XQGHU WKH
                                                                      VWDWXWHlDIIjG)GWK&LUXQSXEOLVKHGSHU
                                '                                    FXULDP7KH)HGHUDO5XOHVRI(YLGHQFHUHVROYHWKLVSRWHQWLDO
                                                                      FRQIOLFWEHWZHHQVWDWHDQGIHGHUDOODZRQWKHLVVXHRIZLWQHVV
  3ODLQWLII DUJXHV WKDW WKH GLVWULFW FRXUW LPSURSHUO\ GHQLHG   FRPSHWHQF\  6HH JHQHUDOO\ sRVHSK 0 0F/DXJKOLQ
3ODLQWLIIjVPRWLRQWRYDFDWHWKHMXGJPHQWLQRUGHUWRJLYHKHU
DGGLWLRQDOWLPHWRREWDLQ DQ H[SHUW:HUHYLHZGHQLDOVRI
         /HJJY&KRSUDHWDO                            1R        1R                          /HJJY&KRSUDHWDO     

:(,167(,1j6(9,'(1&(>@5XOH                            WKDW WKH LQFLVLRQ KDG EHHQ RULJLQDOO\ VXWXUHG DQG GHKLVFHG
LQFRUSRUDWHV WKH (ULH PDQGDWH E\ H[SUHVVO\ SURYLGLQJ WKDW               QHFHVVLWDWLQJWKDWLWEHUHVXWXUHG0LWWHPH\HUjVDIILGDYLWVIDLO
m6WDWHODZVXSSOLHVWKHUXOHRIGHFLVLRQWKHFRPSHWHQF\RID                  WRLGHQWLI\DQ\PDWHULDOIDFWWRFDVWGRXEWRQWKHVHUHFRUGV
ZLWQHVVVKDOOEHGHWHUPLQHGLQDFFRUGDQFHZLWK6WDWHODZl                     7KH\DUHVSHFXODWLYHDWPRVWWKH\GHPRQVWUDWHWKHSRVVLELOLW\
)HG5(YLGFI)HG5(YLGVWDWHODZDSSOLHVLQ                 RI PDOSUDFWLFH QRW WKH SUREDELOLW\ RI PDOSUDFWLFH  7KH\
TXHVWLRQVRISUHVXPSWLRQ)HG5(YLGTXHVWLRQVRI                     WKHUHIRUHIDLOWRHVWDEOLVKDJHQXLQHLVVXHDVWRFDXVDWLRQ6HH
SULYLOHJHmVKDOOEHGHWHUPLQHGLQDFFRUGDQFHZLWK6WDWHODZl                 %REXUND Y $GFRFN  )G   WK &LU 
                                                                               GLVFXVVLQJVXIILFLHQF\RIHYLGHQFHRIFDXVDWLRQXQGHU7HQQ
  7KH7HQQHVVHHVWDWXWHLVSUHFLVHO\WKHW\SHRIUXOH)HG5                  &RGH $QQ  D KROGLQJ WKDW WKH 7HQQHVVHH
(YLGDGGUHVVHV,WSURYLGHVLQSDUW                                     PDOSUDFWLFHVWDWXWHUHTXLUHVSURRIWKDWLWLVPRUHOLNHO\WKDQ
                                                                               QRWWKDWWKHGHIHQGDQWjVQHJOLJHQFHFDXVHGWKHLQMXU\mPHUH
     &ODLPDQWjVEXUGHQLQPDOSUDFWLFHDFWLRQ                     SRVVLELOLW\lLVQRWHQRXJK
     ([SHUWWHVWLPRQ\3UHVXPSWLRQRIQHJOLJHQFHsXU\
     LQVWUXFWLRQVD,QDPDOSUDFWLFHDFWLRQWKHFODLPDQW                   0U/HJJjVGHSRVLWLRQWHVWLPRQ\FDQQRWUHVXUUHFW3ODLQWLIIjV
     VKDOOKDYHWKHEXUGHQRISURYLQJE\HYLGHQFHDVSURYLGHG                  FODLPEHFDXVHLWLVLQFRQFOXVLYH
     LQVXEVHFWLRQE
        7KHUHFRJQL]HGVWDQGDUGRIDFFHSWDEOHSURIHVVLRQDO                   5HJDUGLQJ3ODLQWLIIjVDWWHPSWWRHVWDEOLVKPDOSUDFWLFHLQKHU
     SUDFWLFH LQ WKH SURIHVVLRQ DQG WKH VSHFLDOW\ WKHUHRI LI          SRVWRSHUDWLYHFDUHLWOLNHZLVHIDOOVVKRUWEHFDXVH0LWWHPH\HU
     DQ\ WKDW WKH GHIHQGDQW SUDFWLFHV LQ WKH FRPPXQLW\ LQ             IDLOHGWRLQGLFDWHZKDWVKRXOGKDYHEHHQGRQHGLIIHUHQWO\WR
     ZKLFKWKHGHIHQGDQWSUDFWLFHVRULQDVLPLODUFRPPXQLW\                   SUHYHQWWKHLQMXULHVWKDWRFFXUUHG
     DW WKH WLPH WKH DOOHJHG LQMXU\ RU ZURQJIXO DFWLRQ
     RFFXUUHG                                                                  ,Q VKRUW HYHQ LI 'U 0LWWHPH\HU KDG EHHQ GHWHUPLQHG
        7KDWWKHGHIHQGDQWDFWHGZLWKOHVVWKDQRUIDLOHGWR               FRPSHWHQW WR WHVWLI\ KLV DIILGDYLWV IDLOHG WR PHHW WKH
     DFWZLWKRUGLQDU\DQGUHDVRQDEOHFDUHLQDFFRUGDQFHZLWK                  UHTXLUHPHQWVRI7HQQ&RGH$QQDQG5XOH
     VXFKVWDQGDUGDQG                                                       IRUWKHSXUSRVHRIHVWDEOLVKLQJDPHGLFDOPDOSUDFWLFHFODLP
                                                                                                               &
                                                                                 1H[W/HJJDVVHUWVWKDWWKHGLVWULFWFRXUWLPSURSHUO\GHQLHG
      
       3ULRU WR WKH HQDFWPHQW RI 5XOH  IHGHUDO FRXUWV URXWLQHO\ DSSOLHG
                                                                               KHUPRWLRQWRZDLYHWKHUHTXLUHPHQWVRI7HQQ&RGH$QQ
VWDWH 'HDG 0DQjV $FWV LQ FLYLO FDVHV VLQFH VWDWH ODZ JRYHUQHG TXHVWLRQV       E7KHODVWVHQWHQFHRIESURYLGHV
RI FRPSHWHQF\ 'RXEWLQJ WKH HIIHFWLYHQHVV RI WKH 'HDG 0DQjV $FWV WKH          WKDWWKHUHTXLUHPHQWPD\EHZDLYHGLIWKHFRXUWmGHWHUPLQHV
$GYLVRU\ &RPPLWWHH RULJLQDOO\ GUDIWHG 5XOH  WR DYRLG UHTXLULQJ              WKDW WKH DSSURSULDWH ZLWQHVVHV RWKHUZLVH ZRXOG QRW EH
IHGHUDO FRXUWV WR IROORZ VWDWH ODZ RQ WKH LVVXH RI FRPSHWHQF\ RI ZLWQHVVHV
7KH RULJLQDO YHUVLRQ RI 5XOH  FRQWDLQHG RQO\ LWV SUHVHQW ILUVW VHQWHQFH
                                                                               DYDLODEOHl7HQQ&RGH$QQE
                                                                                 7KH GLVWULFW FRXUW IRXQG WKDW 3ODLQWLII IDLOHG WR PDNH D
&RQJUHVV UHMHFWHG WKLV YHUVLRQ DQG DGGHG WKH VHFRQG VHQWHQFH WR 5XOH 
                 (ULH GRFWULQH 6HH :(,167(,1j6 )('(5$/ (9,'(1&(
   >@>E@ >@>D@	>E@                                    )
WR UHIOHFW WKH
                                                                               VKRZLQJWKDWWKHDSSURSULDWHZLWQHVVRWKHUZLVHZRXOGQRWEH
6XSS   :' 9D  REVHUYLQJ WKDW 5XOH  mKDV EHHQ
                                    VHH DOVR 3HFN Y 7HJWPH\HU

                                                                               DYDLODEOHDQGWKDWFRXQVHOjVHIIRUWVWRILQGDQH[SHUWZLWKLQ
SULPDULO\ FRQFHUQHG ZLWK WKH SURSHU DSSOLFDWLRQ RI YDULRXV VWDWHVj GHDG        WKHJHRJUDSKLFUHDOPRIEZHUHFXUVRU\DWEHVW
PDQ VWDWXWHVl DQG WKDW JLYHQ WKLV KLVWRULFDO FRQWH[W mLW LV GRXEWIXO WKDW   7KHFRXUWWKHUHIRUHUHIXVHGWRH[HUFLVHLWVVWDWXWRULO\FUHDWHG
WKH UXOH ZDV LQWHQGHG WR VXSSODQW 5XOH l          )G  WK &LU     GLVFUHWLRQUHJDUGLQJPHGLFDOH[SHUWV7KHGLVWULFWFRXUWUHOLHG
 XQSXEOLVKHG
                                                 DIIjG
    /HJJY&KRSUDHWDO                          1R       1R                             /HJJY&KRSUDHWDO          

'U.OHLQWROGKLPWKDW&KRSUDGLGQRWSXWLQDQ\VWLWFKHV                  $VDSUR[LPDWHUHVXOWRIWKHGHIHQGDQWjVQHJOLJHQW
0U/HJJVWDWHGLQUHOHYDQWSDUWWKDW                                    RURPLVVLRQWKHSODLQWLIIVXIIHUHGLQMXULHVZKLFKZRXOG
                                                                          QRWRWKHUZLVHKDYHRFFXUUHG
     +HFDPHRXWVDLGWKHVXUJHU\ZHQWILQH6DLGZKHQKH                  E 1R SHUVRQ LQ D KHDOWK FDUH SURIHVVLRQ UHTXLULQJ
  ZHQWLQWKHUHZDVDQLQFLVLRQDERXWWZRLQFKHVORQJLQ                 OLFHQVXUHXQGHUWKHODZVRIWKLVVWDWHVKDOOEHFRPSHWHQW
  KHUYDJLQDZDOO7KHUHZHUHQRVWLWFKHVWKDWWKH\KDG                 WR WHVWLI\ LQ DQ\ FRXUW RI ODZ WR HVWDEOLVK WKH IDFWV
  OHIWWKHVWLWFKHVRXW+HSLFNVXSDOLWWOHSDPSKOHWDQG               UHTXLUHGWREHHVWDEOLVKHGE\VXEVHFWLRQDXQOHVVWKH
  GUDZVDSLFWXUHRIWKHYDJLQDDQG\RXNQRZVKRZVPH                  SHUVRQ ZDV OLFHQVHG WR SUDFWLFH LQ WKH VWDWH RU D
  GUDZVLWRXW+HVDLGWKH\ZHQWLQWKHUHDQGMXVWVWLWFKHG             FRQWLJXRXV ERUGHULQJ VWDWH D SURIHVVLRQ RU VSHFLDOW\
  KHUXSDQGVKHZRXOGEHILQH6DLGo7KHQKHNLFNHG                    ZKLFKZRXOGPDNHSHUVRQjVH[SHUWWHVWLPRQ\UHOHYDQWWR
  EDFNDQGVDLGm:HOOHLWKHUWKH\IRUJRWWRSXWLQVWLWFKHV             WKH VSHFLDOW\ ZKLFK ZRXOG PDNH WKH SHUVRQjV H[SHUW
  RUWKHVWLWFKHVIHOORXWEXWPLQHZLOOQRWIDOORXWl$QG             WHVWLPRQ\ UHOHYDQW WR WKH LVVXHV LQ WKH FDVH DQG KDG
  WKDWZDVSUHWW\PXFKLW+HH[SODLQHGWKDW                          SUDFWLFHGWKLVSURIHVVLRQRUVSHFLDOW\LQRQHRIWKHVH
                                                                          VWDWHVGXULQJWKH\HDUSUHFHGLQJWKHGDWHWKDWWKHDOOHJHG
3ODLQWLIIDUJXHVWKDW0U/HJJjVWHVWLPRQ\FUHDWHVDJHQXLQH              LQMXU\RUZURQJIXODFWRFFXUUHG7KLVUXOHVKDOODSSO\WR
LVVXH RI IDFW DQG WKDW 0LWWHPH\HUjV DIILGDYLW PHUHO\              H[SHUWZLWQHVVHVWHVWLI\LQJIRUWKHGHIHQGDQWDVUHEXWWDO
DFNQRZOHGJHWKHH[LVWHQFHRIWKLVGLVSXWH                                ZLWQHVVHV7KHFRXUWPD\ZDLYHWKLVVXEVHFWLRQZKHQLW
                                                                          GHWHUPLQHV WKDW WKH DSSURSULDWH ZLWQHVVHV RWKHUZLVH
  :H GLVDJUHH  7R EHJLQ DV WKH GLVWULFW FRXUW QRWHG WKH      ZRXOGQRWEHDYDLODEOH
0LWWHPH\HU DIILGDYLWV DUH SKUDVHG LQ FRQGLWLRQDO WHUPV
3DUDJUDSK  RI WKH RULJLQDO DIILGDYLW DQG SDJH  RI WKH       7HQQ&RGH$QQ6XSS7KHVWUXFWXUHRI
VXSSOHPHQWDODIILGDYLWVWDWHm,I'U&KRSUDIDLOHGWRVXWXUHWKH        WKH VWDWXWH UHIOHFWV WKH LQWLPDWH UHODWLRQVKLS EHWZHHQ WKH
LQWHULRUYDJLQDZDOOWKDWLVDGHYLDWLRQRIWKHVWDQGDUGRIFDUH      VWDQGDUG RI FDUH DQG WKH TXDOLILFDWLRQ UHTXLUHPHQWV RI WKH
+RZHYHULI'U&KRSUDGLGVXWXUHWKHDQWHULRUYDJLQDOZDOO              PHGLFDOH[SHUWZKRZLOOHVWDEOLVKWKDWVWDQGDUG7KXVWKHUH
GXULQJKLVVXUJHU\WKHQ'U&KRSUDZDVQRWQHJOLJHQWl7KH             FDQ EH OLWWOH GRXEW EXW WKDW  E YLD 5XOH 
DIILGDYLWVIDLOWRUHIHUHQFHDQ\UHFRUGVIURPWKH8QLYHUVLW\RI         DSSOLHVLQWKLVIHGHUDOGLYHUVLW\DFWLRQ)LQDOO\ZHQRWHWKDW
7HQQHVVHH 0HGLFDO &HQWHU RU 8QLYHUVLW\ 8URORJ\ 3&             WZRGLVWULFWFRXUWVKDYHDOUHDG\UHDFKHGWKLVFRQFOXVLRQ6HH
LQGLFDWLQJWKDWWKHUHZDVVXFKDIDLOXUHWRVXWXUHWKHDQWHULRU         5DOSK E\ 5DOSK Y 1DJ\  ) 6XSS   0'
YDJLQDOZDOO,QIDFWHYLGHQFHSUHVHQWHGE\'HIHQGDQWVDV             7HQQ&UXPHO\Y0HPRULDO+RVS,QF)6XSS
SDUWRILWVPRWLRQIRUVXPPDU\MXGJPHQWHVWDEOLVKHVMXVWWKH            Q('7HQQDIIjG)GWK&LU
RSSRVLWH7KH2SHUDWLYH5HSRUWVGDWHG$XJXVWDQG              XQSXEOLVKHG FI %DUWRQ Y $P 5HG &URVV  )
6HSWHPEHU   PDLQWDLQHG E\ WKH 8QLYHUVLW\ RI               6XSS0'$ODKROGLQJWKDWXQGHU5XOH
7HQQHVVHH0HGLFDO&HQWHUVWDWHWKDW'U&KRSUDVXWXUHG0UV              FRPSHWHQF\ UHTXLUHPHQWV XQGHU $ODEDPD 0HGLFDO
/HJJjVDQWHULRUZDOO7KH2SHUDWLYH5HSRUWGDWHG$XJXVW            /LDELOLW\$FWDSSOLHGLQIHGHUDOFRXUWUDWKHUWKDQ5XOH
VWDWHVm>Z@HFORVHGWKHDQWHULRUYDJLQDOZDOOZLWK            DIIjG)GWK&LU,QVXP)HGHUDO5XOHRI
9LFWU\OUXQQLQJVXWXUHls$7KH2SHUDWLYH5HSRUW
GDWHG6HSWHPEHUSUHSDUHGE\'U.OHLQVWDWHGm2Q
LQVSHFWLRQ WKH HQWLUH YDJLQDO IODS GHKLVFHG    >L@W ZDV       
UHVXWXUHG ZLWK UXQQLQJ DQG LQWHUUXSWHG  9LFU\Ol s$             :H KDYH SUHYLRXVO\ GHFOLQHG WR GHFLGH ZKHWKHU 5XOH  RU 
                                                                        FRQWUROV WKH FRPSHWHQF\ RI D PHGLFDO H[SHUW      6HH 5DOSK E\ 5DOSK Y
'U.OHLQjVUHSRUWFOHDUO\FRPPXQLFDWHVKLVLPSUHVVLRQ           1DJ\   )G   WK &LU  m7KHVH LVVXHV DUH PRRW EHFDXVH
                                                                        WKH MXU\ H[SUHVVO\ IRXQG WKDW WKH GHIHQGDQW GLG QRW EUHDFK KLV GXW\ WR WKH
      /HJJY&KRSUDHWDO                               1R         1R                            /HJJY&KRSUDHWDO        

(YLGHQFH  GLFWDWHV WKDW WKH 7HQQHVVHHjV ZLWQHVV                        (YLG  VLQFH WKH ILUVW LV GLUHFWHG DW HVWDEOLVKLQJ WKH
FRPSHWHQF\UXOHJRYHUQVWKHDGPLVVLELOLW\RIPHGLFDOH[SHUW                     VXEVWDQWLYHLVVXHLQWKHFDVHDQGWKHVHFRQGLVDJDWHNHHSLQJ
WHVWLPRQ\LQWKLVFDVH                                                       PHDVXUHGHVLJQHGWRHQVXUHmIDLUQHVVLQDGPLQLVWUDWLRQlRIWKH
                                                                                FDVH6HH)HG5(YLG
   7KLV GRHV QRW FRPSOHWHO\ HQG RXU DQDO\VLV KRZHYHU
,PSOLFLWLQ3ODLQWLIIjVDUJXPHQWLVWKHDVVXPSWLRQWKDW5XOHV                     ,QFRQFOXVLRQZHKROGWKDWWKHGLVWULFWFRXUWGLGQRWHUULQ
DQGDUHPXWXDOO\H[FOXVLYH:HGRQRWDJUHHZLWK                       DSSO\LQJ)HG5(YLGDQG7HQQ&RGH$QQ
WKLVDVVXPSWLRQ$VWKHIRUHJRLQJGLVFXVVLRQH[SODLQV5XOH                    ELQLWVDQDO\VLV
 GHDOV ZLWK WKH ZLWQHVVjV FRPSHWHQF\ ZKLFK PDNHV LW
HVVHQWLDOO\VXEVWDQWLYHEHFDXVHLWLVmLQWLPDWHO\LQWHUWZLQHGl                                                   %
ZLWKWKHVXEVWDQWLYHODZZKHUHDV5XOHDVLQWHUSUHWHGE\
'DXEHUWLVWUXO\DPHDVXUHRITXDOLILFDWLRQDVLWLVGLUHFWHG                    3ODLQWLII DOVR FKDOOHQJHV WKH GLVWULFW FRXUWjV KROGLQJ WKDW
DW WKH VFLHQFH DQG PHWKRGRORJ\ EHKLQG WKH ZLWQHVVjV                      0LWWHPH\HUjVDIILGDYLWVZHUHLQVXIILFLHQWWRFUHDWHDJHQXLQH
WHVWLPRQ\DQGLVWKHUHIRUHDSURFHGXUDOLVVXH7KXVZHVHH                 LVVXH RI GLVSXWHG IDFW  0LWWHPH\HUjV DIILGDYLWV DOOHJH WZR
QRUHDVRQZK\WKHWZRUXOHVFDQQRWZRUNLQWDQGHPEHFDXVH                      VHSDUDWH DFWV RU RPLVVLRQV WKDW FRQVWLWXWHG PHGLFDO
WKH\DUHQRWLQGLUHFWFRQIOLFW6HH5RELQ.XQGLV&UDLJ:KHQ                  PDOSUDFWLFH  'U &KRSUD IDLOHG WR VXWXUH WKH VXUJLFDO
'DXEHUW*HWV(ULH0HGLFDO&HUWDLQW\DQG0HGLFDO([SHUW                         LQFLVLRQ DQGRU  LPSURSHU SRVWVXUJLFDO FDUH E\
7HVWLPRQ\ LQ )HGHUDO &RXUW  'HQY 8 / 5HY                 XQLGHQWLILHGHPSOR\HHVRI8QLYHUVLW\8URORJ\
SRVLWLQJWKDWVWDWHPHGLFDOFHUWDLQW\VWDQGDUGVDQG
5XOH  DUH QRW LQ GLUHFW FRQIOLFW EHFDXVH VWDWH PHGLFDO                7KHGLVWULFWFRXUWUHMHFWHG0LWWHPH\HUjVDIILGDYLWDVIDLOLQJ
FHUWDLQW\VWDQGDUGVLQJHQHUDODUHHVVHQWLDOO\VXEVWDQWLYHWKDW                WRVHWIRUWKZLWKVSHFLILFLW\IDFWVVXIILFLHQWWRFUHDWHDJHQXLQH
LVmLPSRVHFHUWDLQW\VWDQGDUGVWRHQVXUHWKDWWKHFRQFOXVLRQ                   LVVXHRIIDFWIRUWULDODVUHTXLUHGE\)HG5&LY3H7KH
DFWXDOO\PHHWVWKHFRQILGHQFHWKUHVKROGlDQG5XOHmVHHNV                   ORZHUFRXUWKHOGWKDW0LWWHPH\HUIDLOHGWRVSHFLILFDOO\LQIRUP
WR HQVXUH WKDW H[SHUW WHVWLPRQ\ LV EDVHG RQ FUHGLEOH DQG               WKHFRXUWDVWRKRZWKHGHYLDWLRQIURPWKHVWDQGDUGRIFDUH
UHOLDEOH VFLHQFHWKDW WKH H[SHUW FDQ UHDFK WKH FRQFOXVLRQ               RFFXUUHGDQGZKRVSHFLILFDOO\FRPPLWWHGWKHGHYLDWLRQ7KH
VWDWHGWKURXJKSURSHUVFLHQWLILFPHWKRGRORJ\l7KXVLID                     GLVWULFWFRXUWDOVRUHMHFWHG'U0LWWHPH\HUjVRSLQLRQEHFDXVH
ZLWQHVVLVGHHPHGFRPSHWHQWWRWHVWLI\WRWKHVXEVWDQWLYHLVVXH                 LWZDVPHUHO\FRQGLWLRQDOWKDWLVKHDOOHJHGWKDW'U&KRSUD
LQWKHFDVHVXFKDVWKHVWDQGDUGRIFDUHKLVRUKHUWHVWLPRQ\                 KDGGHYLDWHGIURPWKHVWDQGDUGRIFDUHmLIlKHKDGIDLOHGWR
VKRXOG WKHQ EH VFUHHQHG E\ 5XOH  WR GHWHUPLQH LI LW LV            VXWXUHWKHDQWHULRUYDJLQDOZDOO
RWKHUZLVHDGPLVVLEOHH[SHUWWHVWLPRQ\:HWKHUHIRUHILQGQR
FRQIOLFWEHWZHHQ7HQQ&RGH$QQEDQG)HG5                       3ODLQWLIIFRQWHQGVWKDWWKHGHSRVLWLRQWHVWLPRQ\RI0U/HJJ
                                                                                UHVROYHVDQ\REMHFWLRQWKDW0LWWHPH\HUjVRSLQLRQLVPHUHO\
                                                                                FRQGLWLRQDO RQ WKH LVVXH RI ZKHWKHU 'U &KRSUD IDLOHG WR
SODLQWLII XQGHU WKH DSSURSULDWH VWDQGDUG RI FDUHl +DQVRQ Y 3DUNVLGH
                                                                                VXWXUHWKHDQWHULRUYDJLQDZDOOEHFDXVH0U/HJJWHVWLILHGWKDW
6XUJHU\ &WU  )G   Q WK &LU  m%HFDXVH QHLWKHU
SDUW\ KDV UDLVHG WKH LVVXH RI 'U 2j'D\jV FRPSHWHQF\ DV DQ H[SHUW ZH
DJDLQ GHFOLQH WR FRQVLGHUl WKH UHODWLRQVKLS EHWZHHQ )HGHUDO 5XOHV RI
(YLGHQFH  DQG  :DUG Y 8QLWHG 6WDWHV  )G  
                                                                                    
WK &LU  EURDFKLQJ EXW GHFOLQLQJ WR GHFLGH ZKLFK UXOH )HG 5                :H H[SUHVV QR RSLQLRQ DV WR DQ\ SRWHQWLDO FRQIOLFW EHWZHHQ
(YLG  RU )HG 5 (YLG  JRYHUQHG FRPSHWHQF\ RI ZLWQHVV EHFDXVH          DSSOLFDWLRQ RI )HG 5 (YLG  DQG RWKHU VWDWH PHGLFDO FHUWDLQW\
WKH SDUWLHV IDLOHG WR VKRZ WKDW WKH HYLGHQWLDU\ UXOLQJ DIIHFWHG D VXEVWDQWLDO   VWDQGDUGV SHUWDLQLQJ WR EXUGHQ RI SURRI DQG DGPLVVLELOLW\ EHFDXVH VXFK
ULJKW DV UHTXLUHG E\ )HG 5 (YLG D                                  LV QRW DW LVVXH LQ WKLV FDVH
