        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                    
                                   !
                                  
 )5$1. ' 0$77+(:6               
          'HIHQGDQW$SSHOODQW 
                                 1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
    IRUWKH0LGGOH'LVWULFWRI7HQQHVVHHDW1DVKYLOOH
    1Rn$OHWD$7UDXJHU'LVWULFWsXGJH
                $UJXHG2FWREHU
           'HFLGHGDQG)LOHGsDQXDU\
%HIRUH.(,7+.(11('<DQG%$7&+(/'(5&LUFXLW
                     sXGJHV
                   BBBBBBBBBBBBBBBBB
                        &2816(/
$5*8('  & 'RXJODV 7KRUHVHQ )('(5$/ 38%/,&
'()(1'(5j62)),&(1DVKYLOOH7HQQHVVHHIRU$SSHOODQW
7HUU\ s +D\FR[ 1DVKYLOOH 7HQQHVVHH IRU $SSHOOHH
21 %5,()  & 'RXJODV 7KRUHVHQ )('(5$/ 38%/,&
'()(1'(5j62)),&(1DVKYLOOH7HQQHVVHHIRU$SSHOODQW
'HEUD 7HXIHO 3KLOOLSV $66,67$17 81,7(' 67$7(6
$77251(<1DVKYLOOH7HQQHVVHHIRU$SSHOOHH

                             
     8QLWHG6WDWHVY0DWWKHZV                     1R

                     BBBBBBBBBBBBBBBBB
                         23,1,21
                     BBBBBBBBBBBBBBBBB
  .(11('<&LUFXLWsXGJH'HIHQGDQWDSSHDOVWKHGHQLDO
RIKLVPRWLRQWRVXSSUHVVHYLGHQFHREWDLQHGLQFLGHQWWRKLV
DUUHVWDQGKLVVHQWHQFHLPSRVHGSXUVXDQWWRWKH$UPHG&DUHHU
&ULPLQDO $FW $&&$ PDNLQJ D )RXUWK $PHQGPHQW
DUJXPHQWDVWRWKHIRUPHUDQGD)LIWK$PHQGPHQWDUJXPHQW
DVWRWKHODWWHU$IWHUWKHGHQLDORIKLVPRWLRQWRVXSSUHVV
GHIHQGDQWSOHGJXLOW\WRSRVVHVVLRQRIDILUHDUPE\DIHORQ
FRQGLWLRQHGRQKLVULJKWWRDSSHDOWKHGHQLDO
  7KH VWDQGDUGV RI UHYLHZ IRU VHQWHQFLQJ DQG VXSSUHVVLRQ
GHFLVLRQVDUHWKHVDPH:HUHYLHZGLVWULFWFRXUWILQGLQJVRI
ODZGHQRYRDQGILQGLQJVRIIDFWIRUFOHDUHUURU6HH86Y
*XLPRQG)GWK&LU86Y/DWRXI
)GWK&LU
  $SSO\LQJWKHVHVWDQGDUGVRIUHYLHZZHDIILUPWKHGLVWULFW
FRXUWjV GHQLDO RI WKH PRWLRQ WR VXSSUHVV DQG WKH VHQWHQFH
LPSRVHGXSRQWKHGHIHQGDQW
                   ,)DFWXDO%DFNJURXQG
  %HFDXVHWKHGLVWULFWMXGJHLVLQWKHEHVWSRVLWLRQWRZHLJK
WKHFUHGLELOLW\RIZLWQHVVHVZHDFFHSWKHUYHUVLRQRIWKHIDFWV
DVEHLQJZLWKRXWmFOHDUHUURUlDQGUHFRXQWWKHPKHUH,QGHHG
WKHPDWHULDOIDFWVDUHQRWLQGLVSXWH
  2QWKHQLJKWKHZDVDUUHVWHGGHIHQGDQWZDVZDONLQJGRZQ
6HWWOH&RXUWDSULYDWHVWUHHWLQDSXEOLFKRXVLQJSURMHFWLQ
1DVKYLOOH7HQQHVVHH7KHSURMHFWZDVLQDKLJKFULPHDUHD
1RWUHVSDVVLQJ VLJQV ZHUH SRVWHG RQ WKH SURSHUW\  2Q
6HSWHPEHUDWDP2IILFHU%U\DQ(OVWRQZDV
SDWUROOLQJWKHDUHDDQGIRFXVHGKLVDWWHQWLRQRQWKHGHIHQGDQW
EHFDXVH WKH GHIHQGDQW DSSHDUHG WR EH ZDWFKLQJ WKH SROLFH
FUXLVHUFORVHO\$SSDW)URPKLVPDUNHGSROLFHFDU
2IILFHU(OVWRQ\HOOHGWRWKHGHIHQGDQW m+H\EXGG\FRPH
KHUHl  $SS DW   7KH GHIHQGDQW TXLFNHQHG KLV SDFH
      8QLWHG6WDWHVY0DWWKHZV                  1R     1R                     8QLWHG6WDWHVY0DWWKHZV          

DQG GLVWULFW DQG FLUFXLW FRXUWV VKRXOG QRW RYHUUXOH LWV   2IILFHU (OVWRQ FDOOHG RXW DJDLQ DQG JRW RXW RI KLV FDU
GHFLVLRQV6HH$JRVWLQLY)HOWRQ86     'HIHQGDQWEHJDQWRUXQUXQQLQJWRDQDSDUWPHQWEHORQJLQJWR
'HIHQGDQWjV SUHFLVH DUJXPHQW FRQFHUQLQJ WKH HIIHFW RI       RQH0V0D\HVZKRPKHGLGQRWNQRZDQGE\ZKRPKHZDV
$SSUHQGLRQ$OPHQGDUH]7RUUHVKDVEHHQUHMHFWHGE\DWOHDVW       QRWLQYLWHG$SSDW0V0D\HVZKRZDVVWDQGLQJLQ
RQHRWKHUFRXUW6HH86Y3RZHOO)6XSSG('     KHUGRRUZD\ZDVNQRFNHGGRZQE\KLVHQWU\$SSDW
3DYDFDWHGRQRWKHUJURXQGV)GUG&LU       2IILFHU(OVWRQWDFNOHGWKHGHIHQGDQWLQWKHDSDUWPHQW7KH
                                                            JXQZDVIRXQGXQGHUDSLHFHRIIXUQLWXUHLQWKHDSDUWPHQW
    7KHMXGJPHQWRIWKHGLVWULFWFRXUWLVDIILUPHG                 7KHGLVWULFWFRXUWIRXQGWKDWZKLOH2IILFHU(OVWRQODFNHG
                                                                  UHDVRQDEOHVXVSLFLRQWRFRQGXFWDQLQYHVWLJDWLYHVWRSSULRUWR
                                                                  FDOOLQJWRWKHGHIHQGDQWWKHIDFWWKDWWKHGHIHQGDQWFRPPLWWHG
                                                                  FULPHVDVVDXOWWUHVSDVVLQJHWFGXULQJKLVIOLJKWSURYLGHG
                                                                  WKHSUREDEOHFDXVHWRDUUHVWKLPDQGVHDUFKKLVSHUVRQ$IWHU
                                                                  WKH FRQGLWLRQDO JXLOW\ SOHD WKH GLVWULFW FRXUW VHQWHQFHG WKH
                                                                  GHIHQGDQWXQGHUWKH$UPHG&DUHHU&ULPLQDO$FW86&
                                                                  H
                                                                                      ,,6XSSUHVVLRQ2UGHU
                                                                      :H DIILUP WKH GLVWULFW FRXUWjV GHFLVLRQ WR GHQ\ WKH
                                                                  GHIHQGDQWjV PRWLRQ WR VXSSUHVV WKH ILUHDUP IRXQG QHDU KLV
                                                                  SHUVRQ:HDJUHHZLWKWKHGLVWULFWFRXUWWKDWRQFHKHEHJDQWR
                                                                  UXQDQGFRPPLWWHGWKHFULPHVRIWUHVSDVVLQJEUHDNLQJDQG
                                                                  HQWHULQJDQGDVVDXOWWKHGHIHQGDQWZDVVXEMHFWWRDUUHVWDQG
                                                                  VHDUFK7KLVILQGLQJLVFRQVLVWHQWZLWKRXUKROGLQJLQ8QLWHG
                                                                  6WDWHVY3RSH)GWK&LUWKDWmIOLJKW
                                                                  LQWKHIDFHRIDFOHDUVKRZLQJRIODZIXODXWKRULW\VXSSOLH>V@
                                                                  DUHDVRQDEO>H@VXVS>LFLRQ@WKDW>WKHVXVSHFW@ZDVHQJDJHG
                                                                  LQFULPLQDODFWLYLW\l
                                                                     'HIHQGDQWDUJXHVWKDWWKHRIILFHUSURYRNHGWKHGHIHQGDQWjV
                                                                  IOLJKWDQGDVVHUWVWKDWWKLVSURYRFDWLRQVRPHKRZPDGHDQ\
                                                                  VXEVHTXHQWVHDUFKLOOHJDO(VVHQWLDOO\GHIHQGDQWjVDUJXPHQW
                                                                  DVVHUWV WKDW WKH GHIHQGDQWjV VXEVHTXHQW FULPHV ZHUH QRW
                                                                  VXIILFLHQWWRMXVWLI\KLVDUUHVWEHFDXVHWKH\ZRXOGQRWKDYH
                                                                  RFFXUUHGLIWKHRIILFHUKDGQRWFDOOHGRXWWRWKHGHIHQGDQWWR
                                                                  FRPH WR KLP  :H UHMHFW WKLV DUJXPHQW  7KH RIILFHU GLG
                                                                  QRWKLQJLOOHJDOKLVTXHVWLRQZDVHQWLUHO\YDOLGDQGSURYLGHV
                                                                  QRGHIHQVHIRUVXEVHTXHQWFULPLQDODFWLYLW\6XFKDVWDWHPHQW
                                                                  GLGQRWmSURYRNHlDQGWKHUHIRUHGRHVQRWLQVXODWHGHIHQGDQW
     8QLWHG6WDWHVY0DWWKHZV                      1R       1R                     8QLWHG6WDWHVY0DWWKHZV           

IURP WKH FRQVHTXHQFHV RI KLV HQWU\ LQWR D VWUDQJHUjV           DYLROHQWIHORQ\XQGHUWKH$UPHG &DUHHU&ULPLQDO$FW
DSDUWPHQW                                                            86&H86&H%GHILQHVYLROHQW
                                                                       IHORQ\DVDFULPHRQHRIWKHHOHPHQWVRIZKLFKLVWKHmXVH
   0RUHRYHUWKHGHIHQGDQWVOLJKWO\PLVUHSUHVHQWVWKHGLVWULFW         DWWHPSWHGXVHRISK\VLFDOIRUFHDJDLQVWDQRWKHUSHUVRQlRU
FRXUWjVILQGLQJDVWRWKHLQLWLDOVWRS7KHMXGJHZDVUHOXFWDQW       mEXUJODU\ DUVRQl RU WKH XVH RI H[SORVLYHV RU mLQYROYHV
WRDFFHSWWKHRIILFHUjVFKDUDFWHUL]DWLRQRIKLVLQLWLDOFRQWDFW        FRQGXFW WKDW SUHVHQWV D VHULRXV SRWHQWLDO ULVN RI VWDWXWRU\
ZLWKWKHGHIHQGDQWDVD7HUU\VWRS7KHMXGJHDVVXPHGLWZDV          LQMXU\ WR DQRWKHUl  5HFNOHVV DJJUDYDWHG DVVDXOW FHUWDLQO\
VXFKDVWRSDQGWKDWWKHUHZDVQRUHDVRQDEOHVXVSLFLRQDWWKH         mSUHVHQWVl D VHULRXV ULVN RI LQMXU\ WR LWV YLFWLP  8QGHU
WLPHRQO\EHFDXVHWKDWGLGQRWDIIHFWKHURYHUDOOILQGLQJDVWR       7HQQHVVHH ODZ mDVVDXOWl LV GHILQHG DQG LQFRUSRUDWHG E\
WKHDGPLVVLELOLW\RIWKHHYLGHQFH,IKHUILQGLQJRQWKDWLVVXH       UHIHUHQFHLQWKHGHILQLWLRQRImUHFNOHVVDVVDXOWlDVmFDXV>LQJ@
KDGEHHQGHWHUPLQDWLYHDVWKHGHIHQGDQWVXJJHVWVLWVKRXOG            ERGLO\LQMXU\WRDQRWKHUl7&$D1RWKLQJ
EH WKH MXGJH PLJKW KDYH EHHQ PRUH GHILQLWLYH LQ KHU          LQWKH$&&$UHTXLUHVWKHSULRUFRQYLFWLRQVEHIRUFULPHVRI
DVVHVVPHQWRIZKHWKHUWKHRIILFHUjVVLPSOHUHTXHVWWRFRPH             VSHFLILFLQWHQW
KHUHLQUHVSRQVHWRZKLFKWKHGHIHQGDQWFRXOGKDYHSROLWHO\
GHFOLQHGWRGRVRDQGZDONHGDZD\FRQVWLWXWHGDmVWRSl7KH            $V GLG WKH GLVWULFW FRXUW ZH GR QRW ORRN WR WKH IDFWXDO
RIILFHUGLGQRWRUGHUWKHGHIHQGDQWWRVWRS7KHGHIHQGDQW            FLUFXPVWDQFHVVXUURXQGLQJWKDWHDUOLHUFRQYLFWLRQSHU8QLWHG
ZDVLQQRVHQVHmGHWDLQHGlE\WKHRIILFHUjVUHTXHVWWKDWKH            6WDWHVY.DSODQVN\)GWK&LU+RZHYHU
FRPH KLWKHU   7KH 6XSUHPH &RXUW KDV IRXQG WKDW VHL]XUH      ZHFDQFRQVLGHUWKHIDFWVRISULRUFRQYLFWLRQVLIWKRVHIDFWV
EHJLQV DIWHU D VXVSHFW LV WDFNOHG LQ VLPLODU IDFWXDO           DUHQHFHVVDU\IRUDVHQWHQFLQJHQKDQFHPHQWDQGZHUHSDUWRI
FLUFXPVWDQFHV&DOLIRUQLDY+RGDUL'86              WKHLQGLFWPHQW7D\ORUY8QLWHG6WDWHV86
QRVHL]XUHLQDWWHPSWHGVWRSLIWKHGHIHQGDQWGRHVQRW           7KH 'HIHQGDQW SOHG WR WZR FRXQWV LQ sXO\ 
VXEPLW                                                               ZKLFKVWDWHGWKDWWKHYLFWLPmVXIIHUHGVHULRXVERGLO\LQMXU\l
                                                                       DQG WKDW WKH GHIHQGDQW DFWHG mLQWHQWLRQDOO\ RU NQRZLQJO\l
                 ,,,6HQWHQFLQJ&DOFXODWLRQ                           3ODLQWLIIjVEULHIDW
   7KH GLVWULFW FRXUW VHQWHQFHG GHIHQGDQW WR ILIWHHQ \HDUV       7KHGHIHQGDQWjVVHFRQGDUJXPHQWLVWKDW$SSUHQGLUHQGHUV
ILQGLQJKHKDGWKUHHSULRUYLROHQWIHORQLHV7KHGHIHQGDQW            WKH$&&$XQFRQVWLWXWLRQDOEHFDXVHSULRUFRQYLFWLRQVZHUH
PDNHVWZRDUJXPHQWVFRQFHUQLQJKLVVHQWHQFLQJFDOFXODWLRQ             QRWLQFOXGHGDVHOHPHQWVWREHSURYHGLQKLVLQGLFWPHQWDV
)LUVW KH DUJXHV WKDW KLV SULRU FRQYLFWLRQ LQ 7HQQHVVHH IRU   UHTXLUHGE\WKDWUHFHQWGHFLVLRQ%HFDXVHWKLVDUJXPHQWZDV
UHFNOHVV DJJUDYDWHG DVVDXOW GRHV QRW FRXQW DV D mYLROHQW       QRW UDLVHG EHIRUH WKH GLVWULFW FRXUW ZH UHYLHZ LW IRU SODLQ
IHORQ\l VXFK WKDW KH LV HOLJLEOH IRU VHQWHQFLQJ XQGHU WKH     HUURUsRKQVRQY8QLWHG6WDWHV86
$UPHG&DUHHU&ULPLQDO$FW6HFRQGKHDUJXHVWKDW$SSUHQGL            7KH $SSUHQGL FRXUW VSHFLILFDOO\ GHFOLQHG WR RYHUUXOH FDVHV
Y1HZsHUVH\6&WHIIHFWLYHO\UHQGHUVWKH           ZKLFKIRXQGWKDWLQGLFWPHQWVQHHGQRWLQFOXGHDOOHJDWLRQVRI
$&&$ XQFRQVWLWXWLRQDO E\ XQGHUPLQLQJ WKH IRXQGDWLRQ RI           SULRU FRQYLFWLRQV   6&W DW    +RZHYHU WKH
$OPHQGDUH]7RUUHVY8QLWHG6WDWHV86LQ            GHIHQGDQW DUJXHV WKDW WKH &RXUWjV GHFLVLRQ LQ $SSUHQGL
ZKLFKWKH6XSUHPH&RXUWKHOGWKDWDQLQGLFWPHQWQHHGQRW               XQGHUPLQHG$OPHQGDUH]7RUUHVDQGWKDWZHVKRXOGRYHUUXOH
DOOHJHDSULRUFRQYLFWLRQLILWLVUHOHYDQWRQO\WRVHQWHQFLQJ        WKDW GHFLVLRQ DQG KROG WKH $&&$ XQFRQVWLWXWLRQDO  7KH
:HGLVDJUHHRQERWKFRXQWV                                            6XSUHPH &RXUW KRZHYHU KDV UHFHQWO\ UHPLQGHG XV WKDW
                                                                       WKRXJKLWVGHFLVLRQVPD\KDYHFDVWGRXEWRQHDUOLHURSLQLRQV
  7KH GHIHQGDQWjV ILUVW FODLP LV WKDW RQH RI KLV SULRU        ZHVKRXOGJLYHWKH&RXUWWKHRSSRUWXQLW\WRRYHUUXOHWKHP
FRQYLFWLRQVIRUUHFNOHVVDJJUDYDWHGDVVDXOWGRHVQRWFRXQWDV
