           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     
                                   
                                      1RV
             Y                    
                                    !
                                   
 '$11$ <9211( %(1'(5               
 DQG'$9,' (            
 &8//,9(5               
        'HIHQGDQWV$SSHOODQWV 
                                   
                                  1
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
     IRUWKH0LGGOH'LVWULFWRI7HQQHVVHHDW1DVKYLOOH
    1Rn7RGGs&DPSEHOO'LVWULFWsXGJH
                     $UJXHG$XJXVW
            'HFLGHGDQG)LOHG6HSWHPEHU
    %HIRUH&/$<*,/0$1DQG:$//$&(&LUFXLW
                       sXGJHV




    
     7KH +RQRUDEOH s &OLIIRUG :DOODFH &LUFXLW sXGJH RI WKH 8QLWHG
6WDWHV &RXUW RI $SSHDOV IRU WKH 1LQWK &LUFXLW VLWWLQJ E\ GHVLJQDWLRQ



                                   
     8QLWHG6WDWHVY%HQGHUHWDO       1RV

                     BBBBBBBBBBBBBBBBB
                          &2816(/
$5*8('0DUN&6FUXJJV1DVKYLOOH7HQQHVVHH&0DUN
3LFNUHOO 1DVKYLOOH 7HQQHVVHH IRU $SSHOODQWV  :LOOLDP
&RKHQ $66,67$17 81,7(' 67$7(6 $77251(<
1DVKYLOOH7HQQHVVHHIRU$SSHOOHH21%5,()0DUN&
6FUXJJV1DVKYLOOH7HQQHVVHH&0DUN3LFNUHOO1DVKYLOOH
7HQQHVVHH IRU $SSHOODQWV  'DQLHO s 3HUU\ $66,67$17
81,7('67$7(6$77251(<1DVKYLOOH7HQQHVVHHIRU
$SSHOOHH
                     BBBBBBBBBBBBBBBBB
                         23,1,21
                     BBBBBBBBBBBBBBBBB
  521$/'/((*,/0$1&LUFXLWsXGJH'DQQD<YRQQH
%HQGHUZDVDUUHVWHGRQ)HEUXDU\DIWHUVKHVLJQHGIRU
DQ([SUHVV0DLOSDUFHOWKDW8QLWHG6WDWHVSRVWDOLQVSHFWRUV
KDGSUHYLRXVO\RSHQHGDQGIRXQGWRFRQWDLQDSSUR[LPDWHO\
JUDPVRIFRFDLQHEDVHFUDFN%HQGHUDQGFRGHIHQGDQW
'DYLG(&XOOLYHUZHUHLQGLFWHGRQWKHIROORZLQJILYHFRXQWV
FRQVSLUDF\WRGLVWULEXWHFUDFNDLGLQJDQGDEHWWLQJWKH
XQODZIXO XVH RI WKH 8QLWHG 6WDWHV PDLOV WR FRPPLW D GUXJ
IHORQ\  SRVVHVVLRQ ZLWK LQWHQW WR GLVWULEXWH FUDFN
SRVVHVVLRQZLWKLQWHQWWRGLVWULEXWHSRZGHUFRFDLQHDQG
SRVVHVVLRQRIDILUHDUPE\DFRQYLFWHGIHORQ$MXU\IRXQG
%HQGHUJXLOW\RQDOOILYHFRXQWVDQG&XOOLYHUJXLOW\RQFRXQWV
RQHWZRWKUHHDQGILYH%HQGHUDSSHDOVFKDOOHQJLQJERWK
KHU FRQYLFWLRQ DQG VHQWHQFH ZKLOH &XOOLYHU DSSHDOV KLV
VHQWHQFHRQO\)RUWKHUHDVRQVVHWIRUWKEHORZZH$)),50
%HQGHUjV FRQYLFWLRQ DQG VHQWHQFH DV ZHOO DV WKH VHQWHQFH
LPSRVHGRQ&XOOLYHU
1RV           8QLWHG6WDWHVY%HQGHUHWDO         

                      ,%$&.*5281'
$ )DFWXDOEDFNJURXQG
   ,QHDUO\8QLWHG6WDWHVSRVWDOLQVSHFWRUVREVHUYHGWKH
LQFUHDVHG WUDQVSRUWDWLRQ RI QDUFRWLFV IURP )ORULGD WR WKH
1DVKYLOOH7HQQHVVHHDUHDWKURXJKWKH8QLWHG6WDWHVPDLOV
SDUWLFXODUO\E\([SUHVV0DLO3RVWDOLQVSHFWRUVZHUHRQWKH
ORRNRXW IRU VXVSLFLRXV SDFNDJHV VKLSSHG EHWZHHQ WKHVH
ORFDWLRQVLQRUGHUWRGHWHFWQDUFRWLFVWUDIILFNLQJ2Q)HEUXDU\
   ,QVSHFWRU 6WHYH &KHXYURQW LQWHUFHSWHG ([SUHVV
0DLOSDUFHOQXPEHU(*86WKDWZDVDGGUHVVHGWR
 )RUHVW 5LGJH 'ULYH LQ +HUPLWDJH 7HQQHVVHH  7KH
SDUFHOLQGLFDWHGWKDWWKHVHQGHUZDV:LOOLH0:LOOLDPVRI
 1RUWKZHVW UG 6WUHHW 2SD /RFND )ORULGD 
/DZ HQIRUFHPHQW RIILFLDOV LQ )ORULGD LQIRUPHG WKH SRVWDO
LQVSHFWRUVLQ7HQQHVVHHWKDW:LOOLH0:LOOLDPVZDVQRWD
OLVWHGUHVLGHQWDWWKHJLYHQDGGUHVV
   $Q H[SHULHQFHG GUXJGHWHFWLRQ GRJ ZDV EURXJKW WR WKH
([SUHVV0DLOSDUFHO7KHGRJUHDFWHGSRVLWLYHO\LQGLFDWLQJ
WKDWFRQWUROOHGVXEVWDQFHVZHUHFRQWDLQHGZLWKLQWKHSDFNDJH
,Q DGGLWLRQ WKH SDUFHO ZDV VHFXUHG ZLWK FOHDU SODVWLF WDSH
3RVWDOLQVSHFWRUVKDYHOHDUQHGIURPH[SHULHQFHWKDWSDFNDJHV
FRQWDLQLQJ GUXJV DUH XVXDOO\ VHDOHG LQ WKLV PDQQHU LQ DQ
DWWHPSWWRWUDS WKH RGRULQVLGH*LYHQWKHVHDOLQJDQGWKH
SRVLWLYHLGHQWLILFDWLRQRIWKHSDUFHOE\WKHGUXJGHWHFWLRQGRJ
3RVWDO,QVSHFWRU0D[sRUGDQREWDLQHGDIHGHUDOVHDUFKZDUUDQW
RQ)HEUXDU\WRRSHQWKHSDUFHO2QFHRSHQHGWKH
LQVSHFWRUVIRXQGDSDLURIPHQjVVKRHVLQDVKRHER[$OVR
LQVLGHWKHVKRHER[ZDVDSSUR[LPDWHO\JUDPVRIFRFDLQH
EDVHWKDWKDGEHHQSODFHGLQDVW\URIRDPSODWHWKDWZDVLQ
WXUQIROGHGDQGWDSHGZUDSSHGLQQHZVSDSHUDQGHQFORVHG
LQWZRSDGGHGEDJV7KHSRVWDOLQVSHFWRUVUHPRYHGPRVWRI
WKH FRFDLQH EDVH DQG WKUHH VPDOO VDPSOHV IRU ILHOG WHVWLQJ
SODFLQJDFRRNLHDQGDVPDOOVDPSOHRIWKHFRFDLQHEDVHEDFN
LQ WKH SDUFHO  7KH\ DOVR LQVWDOOHG D WUDQVPLWWHU LQVLGH WKH
SDUFHOWKDWZDVGHVLJQHGWRHPLWDVORZEHHSLQJVLJQDODVORQJ
DVWKHSDUFHOUHPDLQHGLQWDFW2QFHWKHSDUFHOZDVRSHQHG
     8QLWHG6WDWHVY%HQGHUHWDO         1RV         1RV         8QLWHG6WDWHVY%HQGHUHWDO     

KRZHYHU WKH WUDQVPLWWHU ZDV SURJUDPPHG WR HPLW D IDVW          WDEOHGHFLVLRQGHFOLQLQJWRDGGUHVVWKHPHULWVRIDFKDOOHQJH
EHHSLQJVLJQDO                                                       WRDVHQWHQFHXQGHU$SSUHQGLZKHQWKHDUJXPHQWZDVUDLVHG
                                                                        IRUWKHILUVWWLPHDWRUDODUJXPHQWVHHDOVR8QLWHG6WDWHVY
  7KH GHOLYHU\ VXSHUYLVRU DW WKH +HUPLWDJH 3RVW 2IILFH           +DUSHU)GWK&LUDGGUHVVLQJWKH
WHVWLILHG WKDW D ZRPDQ LGHQWLI\LQJ KHUVHOI DV 0UV &XOOLYHU     $SSUHQGLDUJXPHQWRIRQHGHIHQGDQWZKRILOHGDOHWWHUUDLVLQJ
FDOOHGWKHSRVWRIILFHRQFHRQ)HEUXDU\DQGWZLFHRQ           WKH$SSUHQGLLVVXHSULRUWRRUDODUJXPHQWEXWGHFOLQLQJWR
)HEUXDU\   WR LQTXLUH DERXW WKH GHOLYHU\ VWDWXV RI      DGGUHVV WKH PHULWV RI KLV FRGHIHQGDQWjV $SSUHQGL FODLP
([SUHVV0DLOSDUFHOQXPEHU(*867KLVVDPH                    EHFDXVHWKHFRGHIHQGDQWUDLVHGLWSURVHIRUWKHILUVWWLPHDIWHU
ZRPDQDOVRWROGWKHVXSHUYLVRUWKDWVKHKDGLQTXLUHGDERXW              RUDODUJXPHQW,I&XOOLYHUZLVKHVWRSXUVXHDFKDOOHQJHWRKLV
WKH GHOLYHU\ VWDWXV RI KHU SDFNDJH E\ FDOOLQJ WKH WROO IUHH   VHQWHQFHEDVHGRQ$SSUHQGLKHZLOOKDYHWRGRVRE\ILOLQJD
QXPEHUIRU([SUHVV0DLOLQIRUPDWLRQ                                  SHWLWLRQIRUSRVWFRQYLFWLRQUHOLHIXQGHU86&
  2Q)HEUXDU\DWDSSUR[LPDWHO\SP3RVWDO                                  ,,,&21&/86,21
,QVSHFWRU:DOODFH%RZGHQGHOLYHUHGWKHSDUFHOWR)RUHVW
5LGJH 'ULYH +HUPLWDJH 7HQQHVVHH  'DQQD ( %HQGHU                )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50
DFFHSWHGWKHSDUFHODQGVLJQHGWKHGHOLYHU\VKHHWDVm'DQQD             %HQGHUjV FRQYLFWLRQ DQG VHQWHQFH DV ZHOO DV WKH VHQWHQFH
&XOOLYHUl  3ULRU WR WKH FRQWUROOHG GHOLYHU\ sRUGDQ KDG        LPSRVHGRQ&XOOLYHU
REWDLQHG D ZDUUDQW WR FRQGXFW D VHDUFK RI WKH UHFLSLHQWjV
UHVLGHQFH
   $SSUR[LPDWHO\ WKUHH PLQXWHV DIWHU WKH GHOLYHU\ WKH
WUDQVPLWWHU HQFORVHG LQ WKH SDUFHO VZLWFKHG LQWR WKH DODUP
PRGHLQGLFDWLQJWKDWWKHSDUFHOKDGEHHQRSHQHG$QHQWU\
WHDPKDGEHHQZDLWLQJRXWVLGHDQGH[HFXWHGWKHIHGHUDOVHDUFK
ZDUUDQW IRU WKH UHVLGHQFH  8SRQ HQWHULQJ WKH GUXJ
HQIRUFHPHQW DJHQWV FDPH DFURVV D IRXU\HDUROG ER\ RQ D
FRXFK LQ WKH OLYLQJ URRP  7KH\ IRXQG %HQGHU LQ WKH UHDU
EHGURRP6KHZDVWDONLQJRQWKHWHOHSKRQHZLWKWKHRSHQHG
SDUFHO ORFDWHG QH[W WR KHU RQ WKH EHG  %HQGHU ZDV SODFHG
XQGHUDUUHVW
   7KH DJHQWV FRQGXFWHG D WKRURXJK VHDUFK RI %HQGHUjV
UHVLGHQFH  7KH\ IRXQG PDQ\ LWHPV LQGLFDWLYH RI QDUFRWLFV
WUDIILFNLQJ,Q%HQGHUjVEHGURRPWKH\GLVFRYHUHGUHFHLSWV
IURP PRQH\ WUDQVIHUV DQG FDU UHQWDOV D PLUURU ZLWK ZKLWH
SRZGHURQLWDQGDEHDNHURQWKHGUHVVHU7KH\DOVRIRXQG
WZR2UHRFRRNLHWLQV2QHWLQFRQWDLQHGVPDOOEDJJLHVDYLDO
FRQWDLQLQJZKLWHSRZGHUPDULMXDQDDQGUD]RUEODGHV7KH
RWKHUWLQFRQWDLQHGDVPDOOEDJRIFRFDLQHDVZHOODVYLDOV
VWUDLQHUV PHDVXULQJ VSRRQV VFRRSV DQG PXOWLFRORUHG
EDJJLHV$VKDYLQJNLWKHOGQXPHURXVWHVWWXEHVDQGEHDNHUV
    8QLWHG6WDWHVY%HQGHUHWDO        1RV        1RV          8QLWHG6WDWHVY%HQGHUHWDO        

WKH FRPPLVVLRQ RI WKH RIIHQVH DV ORQJ DV LW FRQVWLWXWHV      0RVWRIWKHEHDNHUVFRQWDLQHGWUDFHVRIFRFDLQHDQG%HQGHUjV
UHDVRQDEO\IRUHVHHDEOHFRQGXFWjl8QLWHG6WDWHVY1LFKROV          ILQJHUSULQWVZHUHIRXQGRQRQHRIWKHP2QHEHDNHUWKDWZDV
)GWK&LUDIIjG86         PLVVLQJIURPWKHFROOHFWLRQLQWKHVKDYLQJNLWZDVIRXQGRQ
TXRWLQJ8QLWHG6WDWHVY:LOOLDPV)GWK            %HQGHUjVGUHVVHU
&LU$OWKRXJKWKHUHLVQRFDVHRQSRLQWLQRXUFLUFXLW
LQZKLFKDGHIHQGDQWKDVDUJXHGWKDWKHLQFRUUHFWO\UHFHLYHG            7KHDJHQWVDOVRIRXQGWZRKDQGJXQVLQWKHEHGURRPFORVHW
D WZROHYHO HQKDQFHPHQW XQGHU 86 6HQWHQFLQJ *XLGHOLQH         2QHZDVORDGHGDQGIRXQGRQDVKHOILQWKHFORVHWWKHRWKHU
 'E EHFDXVH KH ZDV LQ DQRWKHU VWDWH ZKHQ WKH       ZDVIRXQGLQDEULHIFDVHRQWKHFORVHWIORRU7KHEULHIFDVH
FRQVSLUDF\ ZDV XQFRYHUHG ZH GR QRW VHH KRZ &XOOLYHUjV        EHORQJHGWR%HQGHUDQGFRQWDLQHGLPSRUWDQWIDPLO\SDSHUV
VLWXDWLRQ LV OHJDOO\ GLVWLQJXLVKDEOH IURP DQ\ RWKHU             2WKHU LWHPV IRXQG LQ WKH UHVLGHQFH LQFOXGHG ([SUHVV 0DLO
FRFRQVSLUDWRUZKRLVVKRZQWREHNQRZOHGJHDEOHDERXWWKH              HQYHORSHVDQGSDFNDJHVDFRIIHHFDQZLWKDIDOVHERWWRPWZR
SUHVHQFHRIWKHILUHDUPVEXWLVQRWSK\VLFDOO\RQWKHSUHPLVHV        VFDOHVDQGWZRERWWOHVFRQWDLQLQJZKLWHSRZGHU
ZKHUHSDUWRIWKHLOOHJDODFWLYLW\RFFXUUHG6HHLG
                                                                         7KHDJHQWVPDLOHGVHYHUDOLWHPVIRXQGGXULQJWKHVHDUFKRI
  ,Q WKH SUHVHQW FDVH WKH GLVWULFW FRXUWjV FRQFOXVLRQ WKDW   %HQGHUjV UHVLGHQFH WR WKH 8QLWHG 6WDWHV 3RVWDO ,QVSHFWLRQ
&XOOLYHUZDVLQFRQVWUXFWLYHSRVVHVVLRQRIDILUHDUPGXULQJD         6HUYLFH 1DWLRQDO )RUHQVLF /DERUDWRU\ LQ 'XOOHV 9LUJLQLD
GUXJWUDIILFNLQJRIIHQVHLVVXSSRUWHGE\ERWKWKHMXU\jVYHUGLFW      $IWHU FRQGXFWLQJ WHVWV WKH ODERUDWRU\ GHWHUPLQHG WKDW WKH
DJDLQVWKLPIRUEHLQJDIHORQLQSRVVHVVLRQRIDILUHDUPDQG          FRPSUHVVHGZKLWHSRZGHULQWKHVW\URIRDPSODWHZDV
WKHGLVWULFWFRXUWjVRZQIDFWXDOILQGLQJWKDWmWKHWZRILUHDUPV       JUDPV RI FRFDLQH EDVH  ,Q DGGLWLRQ WKH ODERUDWRU\ IRXQG
ZHUHFRQQHFWHGZLWKWKHRIIHQVHl:HWKHUHIRUHFRQFOXGHWKDW         WUDFHV RI FRFDLQH RQ PHDVXULQJ VSRRQV IRXU EHDNHUV IRXU
WKHGLVWULFWFRXUWGLGQRWHUULQHQKDQFLQJ&XOOLYHUjVVHQWHQFH       JODVVWHVWWXEHVDQGVHYHUDORIWKHSODVWLFEDJJLHV
XQGHU866HQWHQFLQJ*XLGHOLQH'E
                                                                        %HQGHUDQG&XOOLYHUKDGDQRQJRLQJUHODWLRQVKLSLQFOXGLQJ
+ &XOOLYHUjVEHODWHG$SSUHQGLDUJXPHQW                               WKHIDFWWKDW&XOOLYHUZDVWKHIDWKHURI%HQGHUjVVRQ%RWK
                                                                      %HQGHU DQG &XOOLYHU KDG SULRU IHORQ\ FRQYLFWLRQV  7KH
   )RU WKH ILUVW WLPH DW RUDO DUJXPHQW &XOOLYHUjV FRXQVHO    JRYHUQPHQW SUHVHQWHG HYLGHQFH WKDW EHWZHHQ 'HFHPEHU 
FODLPHGWKDW&XOOLYHUjVVHQWHQFHLVLQYDOLGDVDUHVXOWRIWKH        DQG)HEUXDU\%HQGHUVHQW&XOOLYHUPRQH\
6XSUHPH &RXUWjV GHFLVLRQ LQ$SSUHQGL Y 1HZ sHUVH\         ZLUHWUDQVIHUVWR)ORULGDWRWDOLQJ&XOOLYHUFODLPHG
86&XOOLYHUjVFRXQVHOIDLOHGWRILOHDQ\ZULWWHQ       WKDWWKHZLUHGPRQH\FDPHIURPKLVZRUNGRLQJFRQVWUXFWLRQ
VWDWHPHQWUHJDUGLQJWKHPHULWVRIWKLVDUJXPHQW)XUWKHUPRUH        MREV DQG VHOOLQJ 7VKLUWV  %HWZHHQ $XJXVW RI  DQG
KHVLPSO\DQQRXQFHGDWRUDODUJXPHQWWKDW$SSUHQGLDIIHFWHG           )HEUXDU\ RI   ([SUHVV 0DLO SDFNDJHV ZHUH VHQW WR
&XOOLYHUjV VHQWHQFH ZLWKRXW SURYLGLQJ DQ\ OHJDO RU IDFWXDO    &XOOLYHU DW WKUHH GLIIHUHQW DGGUHVVHV LQ WKH 1DVKYLOOH DUHD
VXSSRUW IRU KLV SRVLWLRQ  7KH JRYHUQPHQW UHVSRQGHG WKDW      &XOOLYHU FODLPHG WKDW WKHVH SDFNDJHV FRQWDLQHG 7VKLUWV RU
&XOOLYHU KDG ZDLYHG WKH $SSUHQGL LVVXH EHFDXVH KH ZDV         RWKHUJLIWV
UDLVLQJLWIRUWKHILUVWWLPHDWRUDODUJXPHQW
                                                                        %HQGHU PDLQWDLQHG WKURXJKRXW KHU WULDO WKDW VKH ZDV QRW
  :HDJUHHZLWKWKHJRYHUQPHQWjVSRVLWLRQWKDW&XOOLYHUKDV           JXLOW\RIGLVWULEXWLQJHLWKHUSRZGHUFRFDLQHRUFRFDLQHEDVH
ZDLYHGDQ\$SSUHQGLFKDOOHQJHRQGLUHFWDSSHDODQGZHZLOO           6KHWZLFHVWDWHGRQGLUHFWH[DPLQDWLRQWKDWVKHKDGQHYHUVROG
WKHUHIRUH QRW DGGUHVV WKLV LVVXH  6HH 8QLWHG 6WDWHV Y      GUXJVEXWKDGEHFRPHDGGLFWHGWRGUXJVLQGXHWRVWUHVV
9DQDPDQ1RV                %HQGHU WHVWLILHG WKDW VKH VPRNHG FUDFNODFHG PDULMXDQD
:/  DW  WK &LU $SU   XQSXEOLVKHG      FLJDUHWWHVDQGWKDWGXULQJWKHFRXUVHRIDZHHNVKHZRXOGXVH
     8QLWHG6WDWHVY%HQGHUHWDO         1RV         1RV          8QLWHG6WDWHVY%HQGHUHWDO       

DSSUR[LPDWHO\RQHRXQFHRIPDULMXDQDDQGILYHWRWHQJUDPV              GHIHQGDQWDFWXDOO\RUFRQVWUXFWLYHO\µSRVVHVVHGjWKHZHDSRQ
RISRZGHUFRFDLQH6KHDOVRVWDWHGWKDWVKHSXUFKDVHGGUXJV            DQGVXFKSRVVHVVLRQZDVGXULQJWKHFRPPLVVLRQRIWKH
ZLWKPRQH\WUDQVIHUUHGIURP&XOOLYHU5HJDUGLQJWKHHYHQWV             RIIHQVHl+LOO)GDW&RQVWUXFWLYHSRVVHVVLRQRID
WKDWRFFXUUHGRQWKHGD\RIKHUDUUHVW%HQGHUFRQWHQGVWKDW            ILUHDUPRFFXUVZKHQWKHGHIHQGDQWKDV
VKH QHYHU RSHQHG WKH SDUFHO WKDW VKH VLJQHG IRU  6KH DOVR
WHVWLILHGWKDWWKHLWHPVRIGUXJSDUDSKHUQDOLDWKDWZHUHVHL]HG           WKH RZQHUVKLS RU GRPLQLRQ RU FRQWURO RYHU WKH LWHP
EHORQJHGWR:DOWHU%DLOH\&XOOLYHUKHUFRGHIHQGDQWjVFRXVLQ              LWVHOIRUGRPLQLRQRYHUWKHSUHPLVHVZKHUHWKHLWHPLV
ZKROLYHGLQWKHVDPHUHVLGHQFH,QDGGLWLRQVKHFRQWHQGHG              ORFDWHG2QFHLWLVHVWDEOLVKHGWKDWDGHIHQGDQWZDVLQ
WKDWVKHGLGQRWNQRZWKDWWKHUHZHUHILUHDUPVLQWKHFORVHW             SRVVHVVLRQ RI D ZHDSRQ GXULQJ WKH FRPPLVVLRQ RI DQ
                                                                          RIIHQVHDSUHVXPSWLRQDULVHVWKDWVXFKSRVVHVVLRQZDV
% 3URFHGXUDOEDFNJURXQG                                                  FRQQHFWHGWRWKHRIIHQVH7KHEXUGHQWKHQVKLIWVWR
                                                                          WKHGHIHQGDQWWRVKRZWKDWLWLVFOHDUO\LPSUREDEOHWKDW
   7KHJRYHUQPHQWLVVXHGDQRULJLQDOLQGLFWPHQWRQ0DUFK              WKHZHDSRQZDVFRQQHFWHGWRWKHRIIHQVH
FKDUJLQJRQO\%HQGHU$VXSHUVHGLQJLQGLFWPHQWZDV
HQWHUHGRQ0D\FKDUJLQJERWK%HQGHUDQG&XOOLYHU               ,GFLWLQJ8QLWHG6WDWHVY6DQFKH])GWK
ZLWKFRQVSLUDF\WRGLVWULEXWHFRFDLQHEDVHLQYLRODWLRQRI          &LU  LQWHUQDO TXRWDWLRQ PDUNV RPLWWHG :H ZLOO
86&XQODZIXOXVHRIDFRPPXQLFDWLRQIDFLOLW\           XSKROG WKH GLVWULFW FRXUWjV IDFWXDO ILQGLQJV XQOHVV WKH\ DUH
LQDGUXJIHORQ\RUDLGLQJDQGDEHWWLQJWKHXQODZIXOXVHRID          FOHDUO\HUURQHRXV6HH+LOO)GDW
FRPPXQLFDWLRQIDFLOLW\LQYLRODWLRQRI86&E
DQG  86&    SRVVHVVLRQ ZLWK LQWHQW WR GLVWULEXWH      %HQGHUDQG&XOOLYHUVKDUHGWKHKRXVHDQGWKHEHGURRPDW
FRFDLQH EDVH LQ YLRODWLRQ RI  86&  D DQG       )RUHVW 5LGJH 'ULYH LQ +HUPLWDJH 7HQQHVVHH HYHQ
86&SRVVHVVLRQZLWKLQWHQWWRGLVWULEXWHSRZGHU             WKRXJK&XOOLYHUVSOLWKLVWLPHEHWZHHQ7HQQHVVHHDQG)ORULGD
FRFDLQHLQYLRODWLRQRI86&DDQG86&             ,WZDVXQFRQWURYHUWHGDWWULDOWKDWWZRKDQGJXQVZHUHIRXQG
DQGEHLQJDFRQYLFWHGIHORQLQSRVVHVVLRQRIDILUHDUP         LQWKHEHGURRPFORVHWDQGWKDWYDULRXVGUXJSDUDSKHUQDOLD
LQ YLRODWLRQ RI  86&  J  7KH GLVWULFW FRXUW    ZDVSUHVHQWLQWKHEHGURRP%HQGHUWHVWLILHGWKDW&XOOLYHU
RUGHUHG WKDW WKH FKDUJHV DJDLQVW %HQGHU DQG &XOOLYHU EH         RZQHGWKHORDGHGKDQGJXQWKDWZDVIRXQGRQWKHVKHOILQWKH
FRQVROLGDWHG IRU WULDO IROORZLQJ &XOOLYHUjV DUUHVW RQ             FORVHW([SHUWWHVWLPRQ\DOVRHVWDEOLVKHGWKDWKDQGJXQVDUH
'HFHPEHU                                                    W\SLFDOO\XVHGLQFRQQHFWLRQZLWKGUXJRIIHQVHV)XUWKHUPRUH
                                                                        WKHMXU\IRXQG&XOOLYHUJXLOW\RIEHLQJDIHORQLQSRVVHVVLRQ
  %HQGHU ILOHG VHYHUDO PRWLRQV LQ OLPLQH WR SURKLELW WKH        RI D ILUHDUP LQ DGGLWLRQ WR FRQVSLULQJ ZLWK %HQGHU WR
JRYHUQPHQWIURPPHQWLRQLQJKHUSULRUIHORQ\FRQYLFWLRQIRU              GLVWULEXWH FRFDLQH EDVH  7KH ILUHDUP FRQYLFWLRQ KDG WR EH
WKHGLVWULEXWLRQRIFRFDLQHLQDQGDPRWLRQWRVXSSUHVV            EDVHG RQ WKH KDQGJXQV ORFDWHG DW WKH )RUHVW 5LGJH 'ULYH
WKHHYLGHQFHVHL]HGIURPKHUUHVLGHQFH7KHFRXUWGHQLHGDOO           DGGUHVVEHFDXVHQRRWKHUSURRIRIILUHDUPVSRVVHVVLRQZDV
RIWKHVHPRWLRQV7ULDOFRPPHQFHGRQ$SULODQG                LQWURGXFHGLQWRHYLGHQFH
FRQFOXGHGRQ$SULO7KHMXU\IRXQG%HQGHUJXLOW\
RQDOOFRXQWVEXWDFTXLWWHG&XOOLYHURISRVVHVVLRQZLWKLQWHQW            (YHQ WKRXJK &XOOLYHU ZDV LQ )ORULGD DW WKH WLPH RI WKH
WR GLVWULEXWH SRZGHU FRFDLQH DV FKDUJHG LQ &RXQW   $        VHDUFKKLVFRQYLFWLRQDURVHIURPKLVLQYROYHPHQWLQVHQGLQJ
VHQWHQFLQJKHDULQJZDVKHOGRQ$XJXVW7KHFRXUW              GUXJSDUFHOVWRWKH1DVKYLOOHUHVLGHQFHDQGUHFHLYLQJPRQH\
VHQWHQFHG%HQGHUWRPRQWKVRQ&RXQWVDQGDQG             WUDQVIHUVIURPWKHVDOHRIGUXJVLQ7HQQHVVHHm7KLVFRXUWKDV
 PRQWKV RQ &RXQW  WR UXQ FRQFXUUHQWO\  &XOOLYHU ZDV      FRQVLVWHQWO\KHOGWKDWSRVVHVVLRQRIDILUHDUPXQGHUVHFWLRQ
                                                                        'EµLVDWWULEXWDEOHWRDFRFRQVSLUDWRUQRWSUHVHQWDW
    8QLWHG6WDWHVY%HQGHUHWDO        1RV        1RV          8QLWHG6WDWHVY%HQGHUHWDO       

  7KH GLVWULFW FRXUW KHDUG ERWK SURRI DQG DUJXPHQW DW WKH    VHQWHQFHGWRPRQWKVRQ&RXQWVDQGPRQWKVRQ
VHQWHQFLQJKHDULQJUHJDUGLQJWKHTXDQWLW\RIFRFDLQHEDVHWKDW        &RXQWDQGPRQWKVRQ&RXQWWRUXQFRQFXUUHQWO\
ZDV FRQWDLQHG LQ WKH SDUFHO  6XFK D KHDULQJ ZDV UHTXLUHG   %HQGHUDQG&XOOLYHUERWKILOHGWLPHO\DSSHDOV
EHFDXVH&XOOLYHUKDGREMHFWHGWRWKHTXDQWLW\RIJUDPV
WKDWZDVXVHGLQWKH3UHVHQWHQFH,QYHVWLJDWLRQ5HSRUW6HH                                   ,,$1$/<6,6
)HG5&ULP3F*LYHQWKHVZRUQWHVWLPRQ\RIsRUGDQ
DQG WKH FRUURERUDWLRQ E\ WKH RWKHU SRVWDO LQVSHFWRUV ZKR      $ 7KHGLVWULFWFRXUWGLGQRWHUULQGHQ\LQJ%HQGHUjV
SDUWLFLSDWHG LQ WKH LQWHUFHSWLRQ DQG VHDUFK RI WKH SDUFHO        PRWLRQWRVXSSUHVV
GHVWLQHGIRU%HQGHUjVUHVLGHQFHZHFRQFOXGHWKDWWKHGLVWULFW
FRXUWjVIDFWXDOILQGLQJWKDW&XOOLYHUZDVUHVSRQVLEOHIRU          %HQGHUDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQIDLOLQJWRJUDQW
JUDPVRIFRFDLQHEDVHZDVQRWFOHDUO\HUURQHRXV6HH8QLWHG          KHUPRWLRQWRVXSSUHVVWKHHYLGHQFHWKDWZDVVHL]HGIURPKHU
6WDWHVY+LOO)GWK&LUGHFODULQJ         UHVLGHQFHRQ)HEUXDU\6KHFRQWHQGVWKDWSUREDEOH
WKDWWKHGLVWULFWFRXUWjVIDFWXDOILQGLQJVZLOOEHXSKHOGXQOHVV      FDXVHWRVHDUFKKHUUHVLGHQFHZDVODFNLQJDQGWKDWWKHZDUUDQW
WKH\DUHFOHDUO\HUURQHRXV7KHGLVWULFWFRXUWZDVWKHUHIRUH        ZDVLPSURSHUO\H[HFXWHGEHFDXVHWKHODZHQIRUFHPHQWDJHQWV
FRUUHFW LQ DVVLJQLQJ &XOOLYHU D EDVH RIIHQVH OHYHO RI     HQWHUHGKHUKRPHDIWHUVKHDFFHSWHGWKHSDFNDJHEXWEHIRUH
EHFDXVHKHZDVUHVSRQVLEOHIRURYHUJUDPVRIFRFDLQHEDVH          VKHRSHQHGLW
XQGHU  'F RI WKH 8QLWHG 6WDWHV 6HQWHQFLQJ
*XLGHOLQHV                                                             :KHQ UHYLHZLQJ GHFLVLRQV RQ PRWLRQV WR VXSSUHVV
                                                                      HYLGHQFHZHZLOOQRWGLVWXUEIDFWXDOILQGLQJVXQOHVVWKH\DUH
* 7KH GLVWULFW FRXUW GLG QRW HUU LQ VHQWHQFLQJ                FOHDUO\HUURQHRXV6HH8QLWHG6WDWHVY6PLWK)G
   &XOOLYHUIRUSRVVHVVLQJDILUHDUPLQFRQQHFWLRQ                    WK&LU:HUHYLHZOHJDOFRQFOXVLRQVGHQRYR
   ZLWKDGUXJWUDIILFNLQJRIIHQVH                                    6HH LG  $ PDJLVWUDWH MXGJHjV GHFLVLRQ WR LVVXH D VHDUFK
                                                                      ZDUUDQWmLVWREHDFFRUGHGJUHDWGHIHUHQFHE\WKHUHYLHZLQJ
   &XOOLYHUDOVRFKDOOHQJHVWKHGLVWULFWFRXUWjVGHWHUPLQDWLRQ        FRXUWl8QLWHG6WDWHVY/DZVRQ)GWK&LU
WKDW &XOOLYHUjV EDVH RIIHQVH OHYHO VKRXOG EH LQFUHDVHG         FLWDWLRQDQGLQWHUQDOTXRWDWLRQPDUNVRPLWWHG
SXUVXDQW WR  'E RI WKH 8QLWHG 6WDWHV 6HQWHQFLQJ
*XLGHOLQHV7KLV*XLGHOLQHFDOOVIRUDWZROHYHOLQFUHDVHm>L@I         :HKROGWKDWWKHUHZDVSUREDEOHFDXVHWRLVVXHWKHVHDUFK
D GDQJHURXV ZHDSRQ LQFOXGLQJ D ILUHDUP ZDV SRVVHVVHGl        ZDUUDQWLQTXHVWLRQ7KLVFDVHUHSUHVHQWVDW\SLFDOFRQWUROOHG
GXULQJWKHXQODZIXOPDQXIDFWXULQJLPSRUWLQJH[SRUWLQJRU           GHOLYHU\ GUXJ EXVW  3RVWDO ,QVSHFWRU sRUGDQjV DIILGDYLW LQ
WUDIILFNLQJ RI D FRQWUROOHG VXEVWDQFH  $SSOLFDWLRQ QRWH     VXSSRUWRIWKHVHDUFKZDUUDQWFRQWDLQVVXIILFLHQWLQIRUPDWLRQ
IXUWKHUVWDWHVWKDWWKH'EDGMXVWPHQWmVKRXOGEH           WRPDNHLWSUREDEOHWKDWmDVHDUFKZRXOGXQFRYHUHYLGHQFHRI
DSSOLHG LI WKH ZHDSRQ ZDV SUHVHQW XQOHVV LW LV FOHDUO\      ZURQJGRLQJl6PLWK)GDWFLWLQJ,OOLQRLVY*DWHV
LPSUREDEOHWKDWWKHZHDSRQZDVFRQQHFWHGZLWKWKHRIIHQVHl            86     7KH REVHUYHG IUHTXHQF\ RI
8QLWHG6WDWHV6HQWHQFLQJ*XLGHOLQHV0DQXDO'FPW               ([SUHVV 0DLO GUXJ GHOLYHULHV EHWZHHQ )ORULGD DQG WKH
Q  &XOOLYHU DUJXHV WKDW EHFDXVH KH ZDV LQ )ORULGD WKH   1DVKYLOOH DUHD WKH SRVLWLYH LGHQWLILFDWLRQ RI D FRQWUROOHG
ZHDSRQ ZDV QRW SUHVHQW DW WKH ORFDWLRQ ZKHUH KH ZDV          VXEVWDQFH E\ D GUXJGHWHFWLRQ GRJ DQG WKH GLVFRYHU\ RI
FRPPLWWLQJWKHRIIHQVH                                               DSSUR[LPDWHO\JUDPVRIFRFDLQHEDVHLQWKH([SUHVV0DLO
                                                                      SDFNDJHDOOVXSSRUWHGWKHLVVXDQFHRIDQDQWLFLSDWRU\VHDUFK
  )RU D FRXUW WR LPSRVH D VHQWHQFH HQKDQFHPHQW XQGHU          ZDUUDQW6HH/DZVRQ)GKROGLQJWKDWWKHUH
'EmWKHJRYHUQPHQWPXVWHVWDEOLVKWKDWWKH            ZDVSUREDEOHFDXVHWRLVVXHDQDQWLFLSDWRU\VHDUFKZDUUDQWLQ
                                                                      D VLPLODU FRQWUROOHGGHOLYHU\ GUXJ FDVH ZKHUH SRVWDO
      8QLWHG6WDWHVY%HQGHUHWDO        1RV         1RV          8QLWHG6WDWHVY%HQGHUHWDO      

LQVSHFWRUVLQWHUFHSWHGDQ([SUHVV0DLOSDFNDJHDQGGHWHFWHG             ZLUHWUDQVIHUVWR)ORULGDWKDWWRWDOHGRYHUWKHFRXUVHRI
QDUFRWLFV                                                             WZR DQG D KDOI PRQWKV  7KH GUXJ SDUDSKHUQDOLD IRXQG DW
                                                                        %HQGHUjVUHVLGHQFHDOVRVWURQJO\LQGLFDWHGWKDW%HQGHUZDV
   )XUWKHUPRUHZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWHUU         HQJDJHGLQWKHVDOHDQGGLVWULEXWLRQRIFRFDLQHEDVHDVGLGWKH
LQGHQ\LQJ%HQGHUjVPRWLRQWRVXSSUHVVEDVHGRQWKHPDQQHU              SUHVHQFHRIILUHDUPVLQWKHYLFLQLW\RIWKHGUXJUHODWHGLWHPV
LQZKLFKWKHZDUUDQWZDVH[HFXWHG%HQGHUWHVWLILHGWKDWVKH           $VVXFKZHFRQFOXGHWKDWWKHHYLGHQFHZDVVXIILFLHQWIRUD
GLGQRWRSHQWKH([SUHVV0DLOSDUFHODIWHUVKHVLJQHGIRULW           UDWLRQDOWULHURIIDFWWRILQG%HQGHUJXLOW\RQDOORIWKHILYH
DQG WKDW WKH WUDQVPLWWHU GLG QRW DFWLYDWH  %XW WKH ODZ       FRXQWVFKDUJHG
HQIRUFHPHQW HQWU\ WHDP WHVWLILHG WKDW WKH WUDQVPLWWHU GLG
DFWLYDWHDQGWKDWWKHSDFNDJHKDGDOUHDG\EHHQRSHQHGDQG              ) 7KH GLVWULFW FRXUW GLG QRW HUU LQ VHQWHQFLQJ
ZDV O\LQJ RQ %HQGHUjV EHG ZKHQ WKH\ ILUVW HQWHUHG WKH             &XOOLYHUEDVHGRQWKHGLVWULEXWLRQRIJUDPV
EHGURRP,QDQ\HYHQWWKHVHDUFKZDUUDQWGLGQRWUHTXLUHWKDW            RIFRFDLQHEDVH
WKH WUDQVPLWWHU EH DFWLYDWHG LQ RUGHU WR FRQGXFW D GD\WLPH
VHDUFK7KHVHDUFKZDUUDQWDGRSWHGWKHFRQGLWLRQVVHWIRUWK               &XOOLYHUFKDOOHQJHVKLVVHQWHQFHE\DUJXLQJWKDWWKHGLVWULFW
LQWKHDIILGDYLWRI3RVWDO,QVSHFWRUsRUGDQsRUGDQjVDIILGDYLW        FRXUW HUUHG LQ KROGLQJ KLP UHVSRQVLEOH IRU FRQVSLULQJ WR
GHVFULEHGWKHIROORZLQJSDUDPHWHUVWRHIIHFWXDWHWKHVHDUFK            GLVWULEXWHDQGIRUGLVWULEXWLQJJUDPVRIFRFDLQHEDVH+H
                                                                        FODLPVWKDWWKHJRYHUQPHQWjVHYLGHQFHDWWULDOHVWDEOLVKHGWKDW
    ,GHVLUHWRLQVWDOO>DWUDQVPLWWHU@DQGIRUDSHULRGRIWHQ         KHZDVUHVSRQVLEOHDWPRVWIRURQO\JUDPVRIFRFDLQH
    GD\V VHHN DXWKRUL]DWLRQ WR HQWHU WKH UHVLGHQFH DQGRU        EDVH7KLVVPDOOGLIIHUHQFHLVVLJQLILFDQWEHFDXVHWKHRIIHQVH
    VWUXFWXUHRIWKHSHUVRQRUSHUVRQVZKRKDYHFXVWRG\RI              OHYHOXQGHUWKH8QLWHG6WDWHV6HQWHQFLQJ*XLGHOLQHVLQFUHDVHV
    WKH SDUFHO DIWHU VRPHRQH DW WKH UHVLGHQFH DFFHSWV DQG       LIWKHTXDQWLW\RIFRFDLQHEDVHH[FHHGVJUDPV
    VLJQVDGHOLYHU\UHFHLSWIRUWKHSDUFHOWDNHVSRVVHVVLRQ
    RIWKHSDUFHODQGWDNHVWKHSDUFHOLQWRWKHUHVLGHQFH,              7KHUHOHYDQWWHVWLPRQ\RQWKLVLVVXHHVWDEOLVKHGWKDWRQFH
    DOVRVHHNDXWKRUL]DWLRQWRHQWHUWKHUHVLGHQFHRUVWUXFWXUH         WKHSDUFHOGHVWLQHGIRUWKH)RUHVW5LGJH'ULYHUHVLGHQFH
    DWQLJKWLIWKHWUDQVPLWWHUHQFORVHGLQWKHSDUFHOHQWHUVWKH       ZDVLQWHUFHSWHGLWZDVRSHQHGSXUVXDQWWRDVHDUFKZDUUDQW
    DODUPPRGHRUFHDVHVWUDQVPLWWLQJ                                  ,Q KLV VZRUQ DIILGDYLW LQ VXSSRUW RI D VXEVHTXHQW VHDUFK
                                                                        ZDUUDQWIRU%HQGHUjVUHVLGHQFH3RVWDO,QVSHFWRU0D[sRUGDQ
(PSKDVLVDGGHG                                                       VWDWHG WKDW WKH SDUFHO FRQWDLQHG D FRRNLHVKDSHG VXEVWDQFH
                                                                        WKDWFRQVWLWXWHGDSSUR[LPDWHO\JUDPVRIFRFDLQHEDVH
  %DVHGRQWKHFRQGLWLRQVGHVFULEHGDERYHLWLVFOHDUWKDWDV          sRUGDQIXUWKHUUHSUHVHQWHGXQGHURDWKWKDWWKHVFDOHXVHGRQ
ORQJ DV WKH SRVWDO LQVSHFWRUV DQG HQWU\ WHDP H[HFXWHG WKH      VLWHWRZHLJKWKHVXEVWDQFHZDVUHOLDEOHDQGDFFXUDWH7KH
VHDUFK ZDUUDQW GXULQJ WKH GD\WLPH WKH SUHUHTXLVLWH IRU WKH     SRVWDO LQVSHFWRUV UHWDLQHG D VDPSOH RI WKH FRFDLQH EDVH WR
HQWU\ ZDV VLPSO\ WKH VLJQLQJ RI WKH GHOLYHU\ UHFHLSW           UHSDFNDJHLQWKHSDUFHOIRUWKHFRQWUROOHGGHOLYHU\sRUGDQ
DFFHSWDQFHRIWKHSDUFHODQGWKHWDNLQJRIWKHSDUFHOLQWRWKH         DOVRWHVWLILHGDWWKHVHQWHQFLQJKHDULQJWKDWWKUHHVDPSOHVZHUH
UHVLGHQFH%HFDXVHWKHVHFRQGLWLRQVZHUHPHWWKHZDUUDQW              H[WUDFWHG IURP WKH FRFDLQH EDVH FRRNLH IRU WKH SXUSRVH RI
ZDV SURSHUO\ H[HFXWHG DQG WKH GLVWULFW FRXUW GLG QRW HUU LQ   FRQGXFWLQJWKHILHOGWHVWWRGHWHUPLQHWKHVXEVWDQFH$VD
GHQ\LQJ%HQGHUjVPRWLRQWRVXSSUHVV                                    UHVXOWWKHVDPSOHWKDWZDVVHQWWRWKHODERUDWRU\JUDPV
                                                                        RIFRFDLQHEDVHZDVQRWWKHIXOODPRXQWRIFRFDLQHEDVHWKDW
                                                                        ZDVRULJLQDOO\FRQWDLQHGLQWKHSDUFHO
    8QLWHG6WDWHVY%HQGHUHWDO         1RV        1RV          8QLWHG6WDWHVY%HQGHUHWDO       

7KH6XSUHPH&RXUWKDVKHOGWKDWm>L@WLVZHOOHVWDEOLVKHGWKDW         % 7KH GLVWULFW FRXUW GLG QRW HUU LQ DOORZLQJ WKH
ZKHQ D MXU\ KDV QR VHQWHQFLQJ IXQFWLRQ LW VKRXOG EH             JRYHUQPHQWWRFURVVH[DPLQH%HQGHUUHJDUGLQJ
DGPRQLVKHG WR UHDFK LWV YHUGLFW ZLWKRXW UHJDUG WR ZKDW            WKHQDWXUHRIKHUSULRUFRQYLFWLRQ
VHQWHQFHPLJKWEHLPSRVHG6KDQQRQY8QLWHG6WDWHV
86IRRWQRWHDQGLQWHUQDOTXRWDWLRQPDUNV               %HQGHU QH[W FRQWHQGV WKDW WKH GLVWULFW FRXUW HUUHG LQ
RPLWWHG:HKDYHKHOGWKDWZKHQDVKHUHWKHMXU\KDGQR            DOORZLQJWKHJRYHUQPHQWWRFURVVH[DPLQHKHUUHJDUGLQJWKH
VHQWHQFLQJIXQFWLRQmWKHGLVWULFWFRXUWGLGQRWHUULQUHIXVLQJ       QDWXUHRIKHUSULRUFRQYLFWLRQ6KHZDVFRQYLFWHGLQRI
WRSHUPLW>WKHFULPLQDOGHIHQGDQW@WRDUJXHDERXWKLVSRVVLEOH         FRQVSLUDF\WRGLVWULEXWHSRZGHUFRFDLQHDQGSRVVHVVLRQZLWK
SXQLVKPHQWl  8QLWHG 6WDWHV Y &KHVQH\  )G        LQWHQWWRGLVWULEXWHWKHGUXJ:HZLOOQRWGLVWXUEDGLVWULFW
WK&LU*LYHQWKLVSUHFHGHQWZHVLPLODUO\FRQFOXGH          FRXUWjVDGPLVVLRQRIWHVWLPRQ\UHJDUGLQJDGHIHQGDQWjVSULRU
WKDW WKH GLVWULFW FRXUW GLG QRW HUU LQ SURKLELWLQJ %HQGHUjV   FRQYLFWLRQIRULPSHDFKPHQWSXUSRVHVXQOHVVZHFRQFOXGHWKDW
FRXQVHOIURPPHQWLRQLQJ%HQGHUjVSRVVLEOHSXQLVKPHQWWRWKH            WKHUHZDVDQDEXVHRIGLVFUHWLRQ6HH8QLWHG6WDWHVY0H\HUV
MXU\                                                                  )GWK&LU
( 7KHHYLGHQFHZDVVXIILFLHQWWRVXSSRUWWKHMXU\jV                     3ULRUWRWULDOWKHGLVWULFWFRXUWFRQVLGHUHGZKHWKHU%HQGHUjV
   JXLOW\YHUGLFWDJDLQVW%HQGHU                                       SULRU FRQYLFWLRQ FRXOG EH LQWURGXFHG IRU WKH SXUSRVH RI
                                                                       LPSHDFKLQJ KHU FUHGLELOLW\ XQGHU 5XOH  RI WKH )HGHUDO
  )LQDOO\%HQGHUVXEPLWVWKDWWKHHYLGHQFHZDVLQVXIILFLHQW           5XOHVRI(YLGHQFH%RWKSDUWLHVDJUHHGWRVWLSXODWHWRWKHIDFW
WRVXSSRUWWKHMXU\jVYHUGLFWWKDWVKHZDVJXLOW\RQDOOILYH          WKDW %HQGHU ZDV FRQYLFWHG RI D IHORQ\ LQ  LQ OLHX RI
FRXQWV:HUHYLHZFODLPVRILQVXIILFLHQF\RIWKHHYLGHQFHE\          UHTXLULQJWKHJRYHUQPHQWWRLQWURGXFHHYLGHQFHRIWKHSULRU
DVNLQJmZKHWKHUDIWHUYLHZLQJWKHHYLGHQFHLQWKHOLJKWPRVW          FRQYLFWLRQLQVXSSRUWRI&RXQWEHLQJDIHORQLQSRVVHVVLRQ
IDYRUDEOHWRWKHSURVHFXWLRQDQ\UDWLRQDOWULHURIIDFWFRXOG         RIDILUHDUP%H\RQGWKHVWLSXODWLRQWKHGLVWULFWFRXUWDJUHHG
KDYH IRXQG WKH HVVHQWLDO HOHPHQWV RI WKH FULPH EH\RQG D       WR mOLPLW WKH FURVVH[DPLQDWLRQ >RI %HQGHU@ WR HVVHQWLDOO\
UHDVRQDEOHGRXEWl8QLWHG6WDWHVY$EOHV)G             UHSHDWLQJWKHVWLSXODWLRQWKDWWKHUHLVDFRQYLFWLRQDQGJHWWLQJ
 WK &LU  FLWLQJsDFNVRQ Y 9LUJLQLD  86     KHUWRFRQILUPVKHDJUHHGWRLWl1HYHUWKHOHVVWKHGLVWULFW
   HPSKDVLV LQ RULJLQDO  )XUWKHUPRUH          FRXUWJDYHWKHIROORZLQJZDUQLQJ
m>F@LUFXPVWDQWLDO HYLGHQFH LV VXIILFLHQW WR VXVWDLQ D
FRQYLFWLRQl,G                                                      >,@WLVDOZD\VRIFRQFHUQWRPHDQGWKHFRXUWWKDWWKHMXU\
                                                                         QRWEHPLVOHG6RLIRQGLUHFWH[DPLQDWLRQ0V%HQGHU
   %HQGHUPDLQWDLQVWKDWmWKHHYLGHQFHSUHVHQWHGWRWKHMXU\             DIILUPDWLYHO\GHQLHGNQRZOHGJHRIGUXJVDQGRWKHUZLVH
LVVLPSO\WKDWRI'DQQD%HQGHUEHLQJDGUXJDGGLFWXVHUZKR              VHWVXSVRPHWKLQJFRQWUDU\WRWKHREYLRXVWKHQVKHZLOO
UHFHLYHGDSDFNDJHWKDWFRQWDLQHGDUHODWLYHO\VPDOODPRXQW              EHRSHQLQJWKHGRRUDQGVKHFDQPDNHWKHQDWXUHRIWKH
RI FUDFN FRFDLQH RQ )HEUXDU\  l DQG WKDW WKH            FRQYLFWLRQPRUHSUREDWLYHWKDQLWRWKHUZLVHLVE\RSHQLQJ
HYLGHQFHWKHUHIRUHGRHVQRWVXSSRUWDQLQIHUHQFHWKDW%HQGHU           WKHGRRU7KHQ,ZLOODOORZWKHJRYHUQPHQWWRJHWLQWR
ZDV HQJDJHG LQ WKH WUDQVSRUWDWLRQ UHFHLSW RU VDOH RI D        ZKDWWKHQDWXUHRIWKHFRQYLFWLRQLV
FRQWUROOHGVXEVWDQFH+HUSRVLWLRQLVXQWHQDEOHLQOLJKWRIWKH
HYLGHQFHWKDWZDVSUHVHQWHGDWWULDO$VDUHVXOWRIVHDUFKLQJ          'HVSLWH WKLV ZDUQLQJ %HQGHU WHVWLILHG RQ WZR GLIIHUHQW
%HQGHUjV UHVLGHQFH WKH JRYHUQPHQW SUHVHQWHG FRQYLQFLQJ           RFFDVLRQVGXULQJGLUHFWH[DPLQDWLRQWKDWVKHKDGQHYHUVROG
HYLGHQFHWKDW%HQGHUKDGUHFHLYHGQXPHURXVSDFNDJHVVHQWE\            GUXJV  6KH DOVR DVVHUWHG WKDW VKH mEHJDQ XVLQJ GUXJV LQ
&XOOLYHUIURP)ORULGDDQGWKDWVKHKDGVHQWPXOWLSOHPRQH\            l7KHGLVWULFWFRXUWFRQFOXGHGWKDWWKHVHVWDWHPHQWVE\
                                                                       %HQGHUZHUHPLVOHDGLQJ,WWKHUHIRUHDOORZHGWKHJRYHUQPHQW
    8QLWHG6WDWHVY%HQGHUHWDO       1RV        1RV          8QLWHG6WDWHVY%HQGHUHWDO      

WR EULQJ RXW RQ FURVVH[DPLQDWLRQ WKH QDWXUH RI KHU SULRU   HQIRUFHPHQW WHDP WKDW H[HFXWHG WKH VHDUFK ZDUUDQW DW
FRQYLFWLRQLQRUGHUWRLPSHDFKKHUFUHGLELOLW\DVDZLWQHVV         %HQGHUjV UHVLGHQFH RQ )HEUXDU\    +H UHFRYHUHG
m>:@KHQDSDUW\RSHQVXSDVXEMHFW>WKHSDUW\@FDQQRW          VHYHUDO LWHPV IURP %HQGHUjV EHGURRP LQFOXGLQJ WKH
FRPSODLQRQDSSHDOLIWKHRSSRVLQJSDUW\LQWURGXFHVHYLGHQFH         SDSHUZRUNGHWDLOLQJWKHPRQH\WUDQVIHUVDQGWKHFRRNLHWLQV
RQWKHVDPHVXEMHFWl8QLWHG6WDWHVY5DPRV)G         DQGVKDYLQJNLWWKDWFRQWDLQHGGUXJSDUDSKHUQDOLD
WK&LU
                                                                        %HQGHUDUJXHVWKDW'RQHJDQmZDVQRWSURSHUO\TXDOLILHGDV
   :H FRQFOXGH WKDW WKH GLVWULFW FRXUW GLG QRW DEXVH LWV    DQH[SHUWZLWQHVVLQWKDWKHKDGOLWWOHLIDQ\GLUHFWH[SHULHQFH
GLVFUHWLRQLQDOORZLQJWKHJRYHUQPHQWWRLPSHDFK%HQGHUjV            ZLWKWKHVDOHDQGGLVWULEXWLRQRIFUDFNFRFDLQHl$GLVWULFW
FUHGLELOLW\ZLWKHYLGHQFHRIKHUSULRUFRQYLFWLRQ%HQGHUjV         FRXUWjVDGPLVVLRQRIH[SHUWWHVWLPRQ\KRZHYHUZLOOQRWEH
VWDWHPHQWV RQ GLUHFW H[DPLQDWLRQ WKDW VKH KDG QHYHU VROG     GLVWXUEHGXQOHVVWKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQ6HH
GUXJVDQGGLGQRWEHJLQXVLQJWKHP XQWLORSHQHGWKH            8QLWHG6WDWHVY7RFFR)GWK&LU
GRRU WR EULQJLQJ LQWR HYLGHQFH WKH QDWXUH RI KHU SULRU      :HFRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQ
FRQYLFWLRQIRUFRQVSLUDF\WRGLVWULEXWHDQGSRVVHVVLRQZLWK          LQ DOORZLQJ 'RQHJDQ WR WHVWLI\ DV DQ H[SHUW RQ WKH GUXJ
LQWHQWWRGLVWULEXWHFRFDLQH$WWKHFRQFOXVLRQRIWKHWULDOWKH   WUDIILFNLQJEXVLQHVVDQGWKHPDQXIDFWXUHDQGXVHRISRZGHU
GLVWULFWFRXUWLQVWUXFWHGWKHMXU\WRWDNHWKHHYLGHQFHUHJDUGLQJ    FRFDLQH DQG FRFDLQH EDVH  7KLV FRXUW mKDV DOORZHG SROLFH
%HQGHUjV SULRU FRQYLFWLRQ LQWR FRQVLGHUDWLRQ RQO\ IRU WKH     RIILFHUVWRWHVWLI\DVH[SHUWZLWQHVVHVDERXWFULPLQDODFWLYLW\
SXUSRVHVRIHYDOXDWLQJKHUFUHGLELOLW\DQGIRUHVWDEOLVKLQJKHU      VLQFH NQRZOHGJH RI VXFK DFWLYLW\ LV JHQHUDOO\ EH\RQG WKH
JXLOWRQ&RXQW7KHGLVWULFWFRXUWWKXVSURSHUO\DOORZHGWKH      XQGHUVWDQGLQJ RI WKH DYHUDJH OD\PDQl  8QLWHG 6WDWHV Y
JRYHUQPHQWWRXVH%HQGHUjVSULRUFRQYLFWLRQWRLPSHDFKKHU           7KRPDV  )G   WK &LU  FLWDWLRQ DQG
FUHGLELOLW\EXWPLQLPL]HGDQ\SUHMXGLFLDOHIIHFWE\SURYLGLQJ       LQWHUQDOTXRWDWLRQPDUNVRPLWWHG)XUWKHUPRUHZHKDYHKHOG
OLPLWLQJLQVWUXFWLRQVWRWKHMXU\6HH8QLWHG6WDWHVY*DLWDQ     WKDWVXFKH[SHUWWHVWLPRQ\E\SROLFHRIILFHUVLVQRWXQIDLUO\
$FHYHGR)GWK&LUILQGLQJQR            SUHMXGLFLDO SDUWLFXODUO\ ZKHQ WKH GLVWULFW FRXUW SURYLGHV
DEXVHRIGLVFUHWLRQZKHUHWKHGLVWULFWFRXUWDOORZHGHYLGHQFH        FDXWLRQDU\LQVWUXFWLRQVWRWKHMXU\6HHLGDW7KHGLVWULFW
RI WKH GHIHQGDQWjV SULRU GUXJ FRQYLFWLRQ XQGHU VLPLODU        FRXUWJDYHVXFKFDXWLRQDU\LQVWUXFWLRQVLQWKHSUHVHQWFDVH,Q
FLUFXPVWDQFHV                                                      VXP WKH GLVWULFW FRXUW GLG QRW DEXVH LWV GLVFUHWLRQ LQ
                                                                     SHUPLWWLQJ 'RQHJDQ WR WHVWLI\ DV DQ H[SHUW ZLWQHVV DQG
& 7KHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQ                %HQGHU VXIIHUHG QR XQIDLU SUHMXGLFH DV D UHVXOW RI VXFK
   DOORZLQJ2IILFHU'RQHJDQWRWHVWLI\DVDQH[SHUW                  WHVWLPRQ\
   ZLWQHVV
                                                                     ' 7KH GLVWULFW FRXUW GLG QRW HUU LQ SURKLELWLQJ
   %HQGHU IXUWKHU DUJXHV WKDW WKH GLVWULFW FRXUW HUUHG LQ       %HQGHU IURP LQIRUPLQJ WKH MXU\ RI WKH
DOORZLQJ2IILFHUsRKQ'RQHJDQWRWHVWLI\DVDQH[SHUWZLWQHVV           PDQGDWRU\PLQLPXPVHQWHQFHWKDW%HQGHUZRXOG
RQWKHQDWXUHRIWKHGUXJWUDIILFNLQJEXVLQHVV'RQHJDQKDG            IDFHLIFRQYLFWHG
EHHQ D SROLFH RIILFHU ZLWK WKH 1DVKYLOOH 0HWUR 3ROLFH
'HSDUWPHQWIRU\HDUVDQGDPHPEHURIWKH9LFH1DUFRWLFV             %HQGHUDOVRDUJXHVWKDWVKHZDVGHQLHGGXHSURFHVVZKHQ
'LYLVLRQIRURIWKRVH\HDUVDWWKHWLPHRI%HQGHUjVWULDO+H     WKHGLVWULFWFRXUWSURKLELWHGKHUFRXQVHOIURPPHQWLRQLQJWKH
KDG UHFHLYHG H[WHQVLYH WUDLQLQJ LQ GUXJ FULPHV DQG GUXJ      PDQGDWRU\PLQLPXPVHQWHQFHWKDW%HQGHUZRXOGUHFHLYHLI
WUDIILFNLQJDQGKDGHYHQWDXJKWFODVVHVRQGUXJHQIRUFHPHQW          VKHZHUHFRQYLFWHG:HUHYLHZFRQFOXVLRQVRIODZGHQRYR
DQG GUXJ LQWHUGLFWLRQ  'RQHJDQ ZDV D PHPEHU RI WKH ODZ    6HH8QLWHG6WDWHVY.LQJ)GWK&LU
