        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


 3$8/ : *5((5                   ;
         3HWLWLRQHU$SSHOODQW     
                                   
                                     1R
           Y                      
                                    !
                                   
 %(77< 0,7&+(//:DUGHQ           
        5HVSRQGHQW$SSHOOHH 
                                  1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
     IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG
     1RnsRKQ00DQRV'LVWULFWsXGJH
                $UJXHG2FWREHU
          'HFLGHGDQG)LOHG6HSWHPEHU
   %HIRUH.(11('<1255,6DQG0225(&LUFXLW
                      sXGJHV
                   BBBBBBBBBBBBBBBBB
                        &2816(/
$5*8('  5RJHU 0 6\QHQEHUJ 6<1(1%(5* 	
0$5(,1 &OHYHODQG 2KLR 0LFKDHO s %HQ]D &OHYHODQG
2KLRIRU$SSHOODQW0LFKDHO/&ROO\HU2)),&(2)7+(
$77251(< *(1(5$/ 2) 2+,2 &OHYHODQG 2KLR IRU
$SSHOOHH21%5,()5RJHU06\QHQEHUJ6<1(1%(5*
	0$5(,1&OHYHODQG2KLR0LFKDHOs%HQ]D&OHYHODQG
2KLRIRU$SSHOODQW0LFKDHO/&ROO\HU2)),&(2)7+(

                             
      *UHHUY0LWFKHOO                             1R       1R                             *UHHUY0LWFKHOO      

$77251(< *(1(5$/ 2) 2+,2 &OHYHODQG 2KLR IRU                     KLQVXIILFLHQWQDUURZLQJ
$SSHOOHH
                                                                         3HWLWLRQHUDVVHUWVWKDWWKHXVHRIWKHXQGHUO\LQJFULPHLQ
                     BBBBBBBBBBBBBBBBB                                 WKLVFDVHDJJUDYDWHGUREEHU\DVDQDJJUDYDWLQJFLUFXPVWDQFH
                                                                       GRHVQRWmDFWWRQDUURZWKHFODVVRIPXUGHUVHOLJLEOHIRUWKH
                         23,1,21                                       GHDWKSHQDOW\l,QKLVYLHZLWLVZURQJWRDOORZWKHGHDWK
                     BBBBBBBBBBBBBBBBB                                 SHQDOW\ IRU IHORQ\ PXUGHU ZLWKRXW UHTXLULQJ DW OHDVW RQH
                                                                       DGGLWLRQDODJJUDYDWLQJIDFWRU
  $/$1(1255,6&LUFXLWsXGJH3DXO:*UHHUDSSHDOV
IURPWKHGHQLDORIKLVSHWLWLRQIRUDZULWRIKDEHDVFRUSXVILOHG        6XFK VFKHPHV KDYH EHHQ XSKHOG KRZHYHU  6HH 7LVRQ
SXUVXDQWWR86&$IWHUFDUHIXOFRQVLGHUDWLRQRI          VXSUD
WKHQXPHURXVLVVXHVUDLVHGE\SHWLWLRQHUZHDIILUPWKHRUGHUV
RI WKH GLVWULFW FRXUW GHQ\LQJ UHOLHI ZLWK RQH H[FHSWLRQ         LHOHFWURFXWLRQFUXHODQGXQXVXDO
3HWLWLRQHU FRQWHQGV WKDW DSSHOODWH FRXQVHO UHQGHUHG
FRQVWLWXWLRQDOO\LQHIIHFWLYHDVVLVWDQFHLQSUHVHQWLQJKLVGLUHFW         )LQDOO\SHWLWLRQHUFRQWHQGVWKDWHOHFWURFXWLRQFRQVWLWXWHV
DSSHDOVWRWKH2KLRFRXUWV%HFDXVHWKHUHFRUGKDVQRWEHHQ           FUXHO DQG XQXVXDO SXQLVKPHQW  1RW RQO\ KDV WKH
VXIILFLHQWO\GHYHORSHGIRUXVWRPDNHDILQDOGHWHUPLQDWLRQ            FRQVWLWXWLRQDOLW\RIHOHFWURFXWLRQEHHQFRQVLVWHQWO\XSKHOG,Q
FRQFHUQLQJWKHPHULWVRIWKLVFODLPZHVKDOOUHPDQGWRWKH            UH.HPPOHU86EXW2KLRDOORZVIRUWKH
GLVWULFWFRXUWZLWKLQVWUXFWLRQVWKDWLWFRQGXFWDQHYLGHQWLDU\        FKRLFHRIOHWKDOLQMHFWLRQ
KHDULQJRQWKLVRQHLVVXH
                                                                                                      ,9
                                 ,
                                                                          :H FRQFOXGH WKDW SHWLWLRQHU PD\ QRW KDYH UHFHLYHG RQ
  7KH IDFWV WKDW JDYH ULVH WR WKLV FDVH FDQ EH VXPPDUL]HG    GLUHFW DSSHDO WKH DVVLVWDQFH RI FRXQVHO JXDUDQWHHG E\ WKH
EULHIO\ E\ TXRWLQJ DV GLG WKH GLVWULFW FRXUW WKH V\QRSVLV   6L[WK $PHQGPHQW  :H WKHUHIRUH UHYHUVH LQ SDUW DQG
SUHFHGLQJWKHRSLQLRQRIWKH2KLR6XSUHPH&RXUW                       UHPDQG WKLV FDXVH IRU DQ HYLGHQWLDU\ KHDULQJ VR WKDW WKH
                                                                       GLVWULFWFRXUWPD\HYDOXDWHDSSHOODWHFRXQVHOVjSHUIRUPDQFH
       2Q7XHVGD\DIWHUQRRQsDQXDU\WKHERG\RI             ZLWKUHVSHFWWRWKHSHQDOW\SKDVHRIWKHWULDOLQOLJKWRIWKH
    /RXLV$5RWKZDVGLVFRYHUHGRQKLVNLWFKHQIORRU,W             IDFWRUVZHKDYHGLVFXVVHG7KHGLVWULFWFRXUWjVMXGJPHQWLQ
    ZDVGHWHUPLQHGWKDWKHKDGEHHQVWDEEHGRURWKHUZLVH               DOORWKHUUHVSHFWVLVDIILUPHG
    ZRXQGHG WZHQW\WZR WLPHV VHYHUDO RI ZKLFK VWDE
    ZRXQGVSXQFWXUHGWKHOHIWOXQJDQGULJKWYHQWULFOHRIWKH
    KHDUW  7KH WLPH RI GHDWK ZDV HVWDEOLVKHG DV
    DSSUR[LPDWHO\ EHWZHHQ  SP 6XQGD\ QLJKW DQG
    DP0RQGD\PRUQLQJ7KHUHZDVQRVLJQRIDQ\
    VWUXJJOHDQGLWZDVDSSDUHQWWKDW5RWKKDGEHHQVWDEEHG
    ZKLOHKHVDWDWKLVNLWFKHQWDEOH5RWK
VKRPHKDGEHHQ
    WKRURXJKO\ VHDUFKHG %ORRGVWDLQV ZHUH DOVR IRXQG
    WKURXJKRXWWKHKRPH
    *UHHUY0LWFKHOO                             1R       1R                            *UHHUY0LWFKHOO         

MXVWLI\ GHDWK HYHQ WKRXJK GHIHQGDQW GLG QRW KDYH LQWHQW WR       3ROLFH RIILFHUV EHJDQ WR TXHVWLRQ 5RWKjV QHLJKERUV
NLOO                                                                 LQFOXGLQJ DSSHOODQW 3DXO : *UHHU  (YHQWXDOO\ WKHLU
                                                                       FDQYDVVLQJ HIIRUWV OHG EDFN WR DSSHOODQW  7KLV ZDV
  HSURRIRIPLWLJDWLRQ                                              EHFDXVHDQHLJKERUKDGREVHUYHGWZRFXWVRQDSSHOODQWjV
                                                                       ILQJHUVRQ0RQGD\DIWHUQRRQ6LQFHWKHPXUGHUKDGEHHQ
   3HWLWLRQHU QH[W REMHFWV WR WKH PDQQHU LQ ZKLFK WKH 2KLR    FRPPLWWHGE\PHDQVRIDNQLIHLQYHVWLJDWRUVEHJDQWR
VWDWXWH DOORZV ZHLJKLQJ RI WKH DJJUDYDWLQJ DQG PLWLJDWLQJ       TXHVWLRQDSSHOODQWPRUHFORVHO\FRQFHUQLQJKLVZRXQGV
FLUFXPVWDQFHVEHFDXVHLWGRHVmQRWUHTXLUHWKHVWDWHWRSURYH          DQGKLVUHODWLRQVKLSWRWKHYLFWLP,WZDVHVWDEOLVKHGWKDW
WKHDEVHQFHRIDQ\PLWLJDWLQJIDFWRUVRUWKDWGHDWKLVWKHRQO\        5RWK KDG UHQWHG D KRPH WR DSSHOODQW ZKR ZDV
DSSURSULDWHSHQDOW\l                                                XQHPSOR\HGDQGDOORZHGKLPWRPDNHUHSDLUVLQOLHXRI
                                                                       SD\LQJ UHQW  $OVR 5RWK KDG GXULQJ WKH WLPH RI
  7KH6XSUHPH&RXUWRQO\UHTXLUHVWKDWWKHVWDWXWRU\VFKHPH            DSSHOODQWjV WHQDQF\ SURYLGHG LQWHU DOLD IRRG PRQH\
UHTXLUHV WKDW WKH DJJUDYDWLQJ FLUFXPVWDQFHV RXWZHLJK WKH         DQGDKRWSODWHIRUDSSHOODQWDQGKLVJLUOIULHQG,WZDV
PLWLJDWLQJRQHV6HH%O\VWRQHY3HQQV\OYDQLD86           HVWDEOLVKHG WKDW 5RWK ZDV FRQWHPSODWLQJ HYLFWLRQ RI
 VFKHPH PDQGDWLQJ GHDWK SHQDOW\ LI MXU\ ILQGV RQH       DSSHOODQW$IWHUKHDULQJDERXWFXWVRQDSSHOODQWjVILQJHUV
DJJUDYDWLQJ FLUFXPVWDQFH DQG QR PLWLJDWLQJ FLUFXPVWDQFHV          SROLFH UHTXHVWHG DSSHOODQW WR DFFRPSDQ\ WKHP WR WKH
VDWLVILHVWKH(LJKWK$PHQGPHQW                                      SROLFHVWDWLRQZKLFKKHGLG
  ISURSRUWLRQDOLW\UHYLHZ                                              3ROLFHZLWKWKHSHUPLVVLRQRIDSSHOODQWjVJLUOIULHQG
                                                                       SHUIRUPHGDVHDUFKRIWKHFRXSOHjVUHVLGHQFH7KHUHLQ
  $OWKRXJK SURSRUWLRQDOLW\ UHYLHZ LV QRW FRQVWLWXWLRQDOO\         SROLFHGLVFRYHUHGYDULRXVDUWLFOHVRIEORRG\FORWKLQJDQG
UHTXLUHGRQFHDVWDWHDGRSWVVXFKDVFKHPHLWPXVWFRPSRUW           D ZULVWZDWFK EHORQJLQJ WR WKH YLFWLP  (YHQWXDOO\
ZLWKGXHSURFHVV2KLRODZSURYLGHVWKDWWKH6XSUHPH&RXUW            DSSHOODQWFRQIHVVHGWRKDYLQJJRQHWKURXJKWKHYLFWLPjV
VKDOO mFRQVLGHU ZKHWKHU WKH VHQWHQFH LV H[FHVVLYH RU            KRPHLQVHDUFKRIYDOXDEOHVEXWKHLQVLVWHGWKDWKHKDG
GLVSURSRUWLRQDWH WR WKH SHQDOW\ LPSRVHG LQ VLPLODU FDVHVl      QRW GRQH VR XQWLO 0RQGD\ PRUQLQJ ZKHQ 5RWK ZDV
2KLR5HY&RGH                                              DOUHDG\GHDG1HLJKERUVHVWDEOLVKHGWKDWDSSHOODQWKDG
  :HQRWHWKDWSHWLWLRQHUKDVQR(LJKWK$PHQGPHQWULJKWWR             JRQHWRVHH5RWKDWDSSUR[LPDWHO\SPWKHQLJKW
SURSRUWLRQDOLW\UHYLHZ&RHY%HOO)GWK           RIWKHPXUGHU
&LU   )XUWKHUPRUH WKH UHFRUG IDLOV WR VXSSRUW             2Q )HEUXDU\   DSSHOODQW ZDV LQGLFWHG RQ WKH
SHWLWLRQHUjVFRQWHQWLRQ                                               IROORZLQJ FKDUJHV RQH FRXQW RI DJJUDYDWHG PXUGHU LQ
  JLQWHUQDWLRQDOODZ                                                YLRODWLRQRI5&$RQHFRXQWRIDJJUDYDWHG
                                                                       PXUGHULQYLRODWLRQRI5&%DQGRQHFRXQWRI
  3HWLWLRQHU EHOLHYHV WKDW WKH GHDWK SHQDOW\ YLRODWHV WKH       DJJUDYDWHGUREEHU\LQYLRODWLRQRI5&$
6XSUHPDF\ &ODXVH EHFDXVH WKH 8QLWHG 6WDWHV KDV VLJQHG           7KHVWDWHLQFOXGHGDQDJJUDYDWHGUREEHU\VSHFLILFDWLRQWR
QXPHURXV LQWHUQDWLRQDO DJUHHPHQWV WKDW SURKLELW WKH GHDWK        WKH VHFRQG PXUGHU FKDUJH SXUVXDQW WR 5&
SHQDOW\                                                              $ WKXV VHHNLQJ WKH GHDWK SHQDOW\ IRU WKH
                                                                       FULPH$SSHOODQWSOHGQRWJXLOW\DQGJDYHQRWLFHRIKLV
  8QWLO WKH 8QLWHG 6WDWHV 6XSUHPH &RXUW KROGV WR WKH           DOLELGHIHQVH)ROORZLQJDWULDORQWKHPHULWVDSSHOODQW
FRQWUDU\ZHDUHFRPSHOOHGWRGHQ\UHOLHIRQWKLVJURXQG              ZDVFRQYLFWHGRIDOOFRXQWVLQFOXGLQJWKHVSHFLILFDWLRQ
      *UHHUY0LWFKHOO                               1R      1R                               *UHHUY0LWFKHOO   

    RQWKHVHFRQGFRXQW$WWKHVHQWHQFLQJSKDVHDSSHOODQW            ,&RQVWLWXWLRQDOLW\RI2KLR'HDWK3HQDOW\6WDWXWH
    SUHVHQWHG HYLGHQFH LQ PLWLJDWLRQ  7KH MXU\ WKHUHXSRQ
    UHFRPPHQGHGWKDWDVHQWHQFHRIGHDWKEHLPSRVHG7KH                  3HWLWLRQHUFKDOOHQJHVWKHFRQVWLWXWLRQDOLW\RIWKH2KLRGHDWK
    WULDO FRXUW WKHQ VHQWHQFHG DSSHOODQW WR GHDWK  %\ LWV     SHQDOW\RQDQXPEHURIIURQWV
    RSLQLRQGDWHG0DUFKZKHUHLQLWFRQGXFWHGLWV
    LQGHSHQGHQW DQDO\VLV DQG UHYLHZ WKH FRXUW RI DSSHDOV          DFUXHODQGXQXVXDOSXQLVKPHQW
    DIILUPHG ERWK WKH WULDO FRXUWjV MXGJPHQW RI FRQYLFWLRQ
    DQGWKHVHQWHQFHRIGHDWK                                            +HILUVWDUJXHVLQDJHQHUDOZD\WKDWWKHGHDWKSHQDOW\LV
                                                                        FUXHODQGXQXVXDOEHFDXVHLWLVH[FHVVLYH7KH6XSUHPH&RXUW
6WDWHY*UHHU2KLR6WG1(G             KDVUHMHFWHGWKLVFKDOOHQJH6HH*UHJJY*HRUJLD86
2KLR                                                     

  5HSUHVHQWHGE\QHZFRXQVHOSHWLWLRQHUDSSHDOHGWR2KLRjV               EDUELWUDU\DSSOLFDWLRQ
1LQWK 'LVWULFW &RXUW RI $SSHDOV UDLVLQJ WZHQW\IRXU
DVVLJQPHQWV RI HUURU  2Q 0DUFK   WKH &RXUW RI           3HWLWLRQHUQH[WDWWDFNVWKHDUELWUDU\PDQQHULQZKLFKWKH
$SSHDOVXSKHOGSHWLWLRQHUjVFRQYLFWLRQDQGVHQWHQFH6WDWHY          GHDWKSHQDOW\LVDSSOLHG$PRQJRWKHUWKLQJVKHQRWHVWKDW
*UHHU1R:/2KLR&W$SS0DU                   UDFHVHHPVWRSOD\DSDUWLQLWVDSSOLFDWLRQSRLQWLQJWRWKH
7KH2KLR6XSUHPH&RXUWDIILUPHG6WDWHY*UHHU            GLVSURSRUWLRQDWHQXPEHURI$IULFDQ$PHULFDQVRQGHDWKURZ
2KLR6WG1(G2KLRUHKjJGHQLHG
 2KLR 6W G   1(G  2KLR  FHUW           :HGHQ\SHWLWLRQHUKDEHDVUHOLHIRQWKLVFODLPEHFDXVHKH
GHQLHG86                                           KDVIDLOHGWRGHPRQVWUDWHDFRQVWLWXWLRQDOO\VLJQLILFDQWULVNRI
                                                                        UDFLDOELDVDIIHFWLQJWKH2KLRFDSLWDOVHQWHQFLQJSURFHVV
   2Q1RYHPEHUSHWLWLRQHUILOHGDSHWLWLRQIRUSRVW
FRQYLFWLRQUHOLHISXUVXDQWWR2KLR5HY&RGH7KH              FQRWOHDVWUHVWULFWLYHSXQLVKPHQW
WULDO FRXUW GHQLHG WKH SHWLWLRQ LQ D RQHSDJH MRXUQDO HQWU\      3HWLWLRQHUFRQWHQGVWKDW WKHGHDWKSHQDOW\mLVQHLWKHUWKH
EDVHGXSRQWKHGRFWULQHRIUHVMXGLFDWDsRXUQDO(QWU\sXQH           OHDVWUHVWULFWLYHQRUDQHIIHFWLYHPHDQVRIGHWHUUHQFHl
s$DW7KH&RXUWRI$SSHDOVUHYHUVHGDQG
UHPDQGHG KRZHYHU LQ RUGHU WR DIIRUG WKH WULDO FRXUW WKH        7KHLPSRVLWLRQRIWKHGHDWKSHQDOW\KDVEHHQFRQVLVWHQWO\
RSSRUWXQLW\WRLVVXHDPRUHGHWDLOHGRSLQLRQ6WDWHY*UHHU          XSKHOGE\WKH6XSUHPH&RXUW8QWLOWKH&RXUWKROGVWRWKH
1R:/2KLR&W$SS)HE                 FRQWUDU\ZHDUHERXQGE\LWVGHFLVLRQV
7KH 2KLR 6XSUHPH &RXUW VXEVHTXHQWO\ GHFOLQHG WR DFFHSW
MXULVGLFWLRQ6WDWHY*UHHU2KLR6WG1(G            GIDLOXUHWRUHTXLUHLQWHQWWRNLOO
2KLRXQSXEOLVKHGWDEOHGHFLVLRQ
                                                                          3HWLWLRQHU DUJXHV WKDW 2KLRjV GHDWK SHQDOW\ VFKHPH LV
  2Q sXQH   WKH FRXUW RI FRPPRQ SOHDV FRPSOLHG         GHIHFWLYHEHFDXVHLWGRHVQRWUHTXLUHSURRIWKDWDGHIHQGDQW
ZLWKWKHGLUHFWLYHRIWKH&RXUWRI$SSHDOVRQFHDJDLQGHQ\LQJ          KDGDmFRQVFLRXVGHVLUHWRNLOOl7KH6XSUHPH&RXUWKDVKHOG
UHOLHI RQ DOO JURXQGV ODUJHO\ EDVHG XSRQ LWV ILQGLQJ RI UHV   WKDWVXFKDFRQVFLRXVGHVLUHWRNLOOLVQRWUHTXLUHGLQRUGHUWR
MXGLFDWD)LQGLQJVDQG2UGHUsXQHs$DW            LPSRVHWKHGHDWKSHQDOW\6HH7LVRQY$UL]RQD86
7KH&RXUWRI$SSHDOVDIILUPHG6WDWHY*UHHU1R                PDMRU SDUWLFLSDWLRQ LQ WKH IHORQ\ FRPPLWWHG
:/2KLR&W$SS2FW7KH2KLR                  FRPELQHGZLWKUHFNOHVVLQGLIIHUHQFHWRKXPDQOLIHHQRXJKWR
6XSUHPH&RXUWGHFOLQHGWRDFFHSWMXULVGLFWLRQ6WDWHY*UHHU
    *UHHUY0LWFKHOO                              1R       1R                                *UHHUY0LWFKHOO        

  WKH VWDWH WULDO FRXUWjV HYLGHQWLDU\ UXOLQJV DUH QRW            2KLR 6W G   1(G  2KLR 
  FRJQL]DEOHLQDIHGHUDOKDEHDVH[FHSWZKHQWKHYLRODWLRQ             XQSXEOLVKHGWDEOHGHFLVLRQ
  RIDVWDWHjVHYLGHQWLDU\UXOHKDVUHVXOWHGLQWKHGHQLDORI
  IXQGDPHQWDOIDLUQHVVWKHUHE\YLRODWLQJGXHSURFHVV                   3HWLWLRQHU WKHQ ILOHG DQ DSSOLFDWLRQ IRU GHOD\HG
                                                                       FRQVLGHUDWLRQSXUVXDQWWR6WDWHY0XUQDKDQ2KLR6WG
                                                                1(G2KLRZKLFKDOOHJHGLQWHUDOLD
                                                                       WKDWDSSHOODWHFRXQVHOKDGUHQGHUHGLQHIIHFWLYHDVVLVWDQFHE\
     *UHHUDVVHUWVWKDWWKHH[FOXVLRQGHQLHGKLPKLVULJKWRI          IDLOLQJ WR UDLVH WKLUW\IRXU DVVLJQPHQWV RI HUURU RQ GLUHFW
  GXHSURFHVV\HWKHKDVQRWFRQYLQFHGWKLV&RXUWWKDWWKH           DSSHDO  7KH &RXUW RI $SSHDOV GHQLHG WKH DSSOLFDWLRQ
  H[FOXVLRQZDVLQYLRODWLRQRI2KLRjVHYLGHQWLDU\UXOHVQRU           FRQFOXGLQJWKDWSHWLWLRQHUKDGIDLOHGWRPHHWWKHKLJKVWDQGDUG
  KDVKHDUWLFXODWHGKRZWKHH[FOXVLRQRIWKHVWDWHPHQWZDV            UHTXLUHG E\ 6WULFNODQG Y :DVKLQJWRQ  86  
  SUHMXGLFLDOWRKLPE\VKRZLQJKRZWKHRXWFRPHRIKLV                 IRUFODLPVRILQHIIHFWLYHDVVLVWDQFH6WDWHY*UHHU
  WULDO RU VHQWHQFLQJ ZRXOG KDYH EHHQ DIIHFWHG E\ WKH          1R2KLR&W$SS)HEXQUHSRUWHGsRXUQDO
  LQFOXVLRQRIWKHVWDWHPHQW                                          (QWU\ s$ DW   7KH 2KLR 6XSUHPH &RXUW DIILUPHG
                                                                       6WDWHY*UHHU2KLR6WG1(G2KLR
0HPRUDQGXP RI 2SLQLRQ $XJ   DW  s$ DW         XQSXEOLVKHG WDEOH GHFLVLRQ  DQG WKH 8QLWHG 6WDWHV
                                                               6XSUHPH&RXUWGHQLHGFHUWLRUDUL0RQWJRPHU\Y2KLR
                                                                       86
   3HWLWLRQHU FRQWHQGV WKDW WKH DGPLVVLELOLW\ RI KHDUVD\
WHVWLPRQ\ mLV DQ LVVXH RI FRQVWLWXWLRQDO GLPHQVLRQl  ,Q         $IWHU H[KDXVWLQJ KLV VWDWHFRXUW DYHQXHV RI UHGUHVV
VXSSRUWKHFLWHVDQXQSXEOLVKHGRUGHURIWKLVFRXUWWKDWRQO\         SHWLWLRQHULQLWLDWHGWKHKDEHDVFRUSXVSURFHHGLQJQRZEHIRUH
LQFLGHQWDOO\LQYROYHVDKHDUVD\LVVXHDQGFHUWDLQO\GRHVQRW           XV RQ 'HFHPEHU   UDLVLQJ WZHQW\HLJKW JURXQGV IRU
VWDQG IRU WKH SURSRVLWLRQ DGYDQFHG E\ SHWLWLRQHU 3DULV Y    UHOLHI  7KH GLVWULFW FRXUW GHQLHG WKH SHWLWLRQ RQ $XJXVW 
7XUQHU 1R   :/  WK &LU 0D\           DQG WKHUHDIWHU GHQLHG D PRWLRQ WR DOWHU RU DPHQG WKH
RUGHUKROGLQJWKDWGHIHQGDQWKDGHVWDEOLVKHGFDXVHDQG          MXGJPHQW
SUHMXGLFH IRU IDLOXUH WR FRPSO\ ZLWK DQ 2KLR UXOH RI
SURFHGXUH                                                                                             ,,
   3HWLWLRQHU DOVR DUJXHV WKDW m>W@KH WULDO FRXUWjV GLVSDUDWH   $6WDQGDUGRI5HYLHZ
WUHDWPHQWRI0U5RWKjVVWDWHPHQWVZDVVRXQIDLUDQGELDVHG
DVWRGHQ\0U*UHHUKLVULJKWRIGXHSURFHVVDVJXDUDQWHHGE\            7KLVFRXUWUHYLHZVDGLVWULFWFRXUWjVOHJDOFRQFOXVLRQVLQD
WKH)LIWKDQG)RXUWHHQWK$PHQGPHQWVl+RZHYHUDVDOUHDG\             KDEHDVSURFHHGLQJGHQRYRDQGLWVIDFWXDOILQGLQJVIRUFOHDU
QRWHG KLV RQO\ H[DPSOHV RI WKLV ELDV DUH FXOOHG IURP WKH    HUURU6HH/XFDVY2j'HD)GWK&LU
WHVWLPRQ\RI0UV0DORQH                                              %HFDXVHSHWLWLRQHUILOHGKLVKDEHDVSHWLWLRQRQ'HFHPEHU
                                                                       UHYLHZRIWKHVWDWHFRXUWjVGHFLVLRQLVJRYHUQHGE\WKH
  :HDIILUPWKHGLVWULFWFRXUW                                        VWDQGDUGVVHWIRUWKLQWKH$QWLWHUURULVPDQG(IIHFWLYH'HDWK
                                                                       3HQDOW\ $FW RI  3XE / 1R   6WDW 
                                                                       $('3$6HH/LQGKY0XUSK\86
                                                                       +DUSVWHUY2KLR)GWK&LU
                                                                       $VDPHQGHG86&GSURYLGHVDVIROORZV
      *UHHUY0LWFKHOO                                1R   1R                             *UHHUY0LWFKHOO     

    G$QDSSOLFDWLRQIRUDZULWRIKDEHDVFRUSXVRQEHKDOI            WRZQ/RFN\RXUGRRUVWRQLJKWDQGLI5LFNFRPHVRYHU
    RIDSHUVRQLQFXVWRG\SXUVXDQWWRWKHMXGJPHQWRID6WDWH          ,jPJRLQJWRKDYHWRNLOOKLPl
    FRXUWVKDOOQRWEHJUDQWHGZLWKUHVSHFWWRDQ\FODLPWKDW
    ZDVDGMXGLFDWHGRQWKHPHULWVLQ6WDWHFRXUWXQOHVVWKH               
    DGMXGLFDWLRQRIWKHFODLP
                                                                          2XUSRVLWLRQLVWKDWWKDWWHVWLPRQ\LIHOLFLWHGIURPWKLV
       UHVXOWHG LQ D GHFLVLRQ WKDW ZDV FRQWUDU\ WR RU      ZLWQHVVJRHVWRVKRZWKDW5RWKZDVDIUDLGRIVRPHRQH
      LQYROYHG DQ XQUHDVRQDEOH DSSOLFDWLRQ RI FOHDUO\             RWKHUWKDQ3DXO*UHHUKHZDVVSHFLILFDOO\DIUDLGRI5LFN
      HVWDEOLVKHG )HGHUDO ODZ DV GHWHUPLQHG E\ WKH               ZKRHYHU5LFNZDVDQGKHZDVVRFRQFHUQHGDERXWWKH
      6XSUHPH&RXUWRIWKH8QLWHG6WDWHVRU                           SUHVHQFHRI5LFNWKDWKHH[SUHVVHGWKDWLQWHUPVRIWHOOLQJ
                                                                        DQHLJKERUWREHZHDU\>VLF@RI5LFNEHLQJEDFNLQWRZQ
       UHVXOWHG LQ D GHFLVLRQ WKDW ZDV EDVHG XSRQ DQ
      XQUHDVRQDEOHGHWHUPLQDWLRQRIWKHIDFWVLQOLJKWRI             7KHSURVHFXWLRQFRQWHQGHGWKDWDGPLVVLRQRIWKHVWDWHPHQW
      WKHHYLGHQFHSUHVHQWHGLQWKH6WDWHFRXUWSURFHHGLQJ           FRQVWLWXWHGKHDUVD\7KHFRXUWDJUHHGWHOOLQJGHIHQVHFRXQVHO
                                                                      m,I\RXNQRZWKHUHDUHSHRSOH>ZKRZHUHLQGHEWWR5RWK@
86&G,Q:LOOLDPVY7D\ORU86             EULQJWKHPLQl
WKH&RXUWH[SODLQHGWKHHIIHFWRIWKLVVHFWLRQLQWKHVH
WHUPV                                                                  %HIRUHWKH2KLR6XSUHPH&RXUWSHWLWLRQHUKDGFRQWHQGHG
                                                                      WKDWWKHVWDWHPHQWm5LFNLVEDFNLQWRZQlIHOOXQGHU2KLR
       ,QVXPGSODFHVDQHZFRQVWUDLQWRQWKH            5XOHRI(YLGHQFHZKLFKSURYLGHVDKHDUVD\H[FHSWLRQ
    SRZHURIDIHGHUDOKDEHDVFRXUWWRJUDQWDVWDWHSULVRQHUjV       IRUVWDWHPHQWVWKDWVKRZDQmH[LVWLQJPHQWDOHPRWLRQDORU
    DSSOLFDWLRQIRUDZULWRIKDEHDVFRUSXVZLWKUHVSHFWWR           SK\VLFDOFRQGLWLRQl7KH&RXUWUHMHFWHGWKLVDUJXPHQW
    FODLPVDGMXGLFDWHGRQWKHPHULWVLQVWDWHFRXUW8QGHU
     G WKH ZULW PD\ LVVXH RQO\ LI RQH RI WKH       7KHGHFHGHQWVLPSO\GRHVQRWVWDWHWKDWKHZDVDIUDLGRI
    IROORZLQJ WZR FRQGLWLRQV LV VDWLVILHG  WKH VWDWHFRXUW     DQ\RQH,QVRIDUDVWKHUHPD\EH GHULYDWLYHLQIHUHQFHV
    DGMXGLFDWLRQUHVXOWHGLQDGHFLVLRQWKDWmZDVFRQWUDU\          IDYRUDEOH WR DSSHOODQW LW PXVW EH DGPLWWHG WKDW WKH\
    WRFOHDUO\HVWDEOLVKHG)HGHUDOODZDVGHWHUPLQHGE\          ZRXOGUHTXLUHWKHMXU\WRVSHFXODWHDQGQRWPHUHO\LQIHU
    WKH 6XSUHPH &RXUW RI WKH 8QLWHG 6WDWHVl RU                  6LQFHDSSHOODQWGLGQRWSUHVHQWKLVGHIHQVHXSRQWKHEDVLV
    mLQYROYHGDQXQUHDVRQDEOHDSSOLFDWLRQRIFOHDUO\          WKDW 5LFN 0F0LOODQ NLOOHG WKH GHFHGHQW LW FDQQRW EH
    HVWDEOLVKHG)HGHUDOODZDVGHWHUPLQHGE\WKH6XSUHPH               FRQWHQGHGWKDWWKHVWDWHPHQWVZHUHDQ\WKLQJRWKHUWKDQ
    &RXUW RI WKH 8QLWHG 6WDWHVl  8QGHU WKH mFRQWUDU\ WRl      LUUHOHYDQWSRVVHVVLQJDSRWHQWLDOIRUPLVOHDGLQJWKHMXU\
    FODXVHDIHGHUDOKDEHDVFRXUWPD\JUDQWWKHZULWLIWKH
    VWDWH FRXUW DUULYHV DW D FRQFOXVLRQ RSSRVLWH WR WKDW      *UHHU2KLR6WGDW1(GDW
    UHDFKHGE\WKLV&RXUWRQDTXHVWLRQRIODZRULIWKHVWDWH
    FRXUWGHFLGHVDFDVHGLIIHUHQWO\WKDQWKLV&RXUWKDVRQD            7KH GLVWULFW FRXUW OLNHZLVH UHMHFWHG SHWLWLRQHUjV FODLP
    VHW RI PDWHULDOO\ LQGLVWLQJXLVKDEOH IDFWV 8QGHU WKH        DOWKRXJK RQ VRPHZKDW GLIIHUHQW JURXQGV JLYHQ WKH KDEHDV
    mXQUHDVRQDEOHDSSOLFDWLRQlFODXVHDIHGHUDOKDEHDVFRXUW         FRQWH[W
    PD\JUDQWWKHZULWLIWKHVWDWHFRXUWLGHQWLILHVWKHFRUUHFW
    JRYHUQLQJOHJDOSULQFLSOHIURPWKLV&RXUWjVGHFLVLRQVEXW             ,WLVDORQJVWDQGLQJSULQFLSOHWKDWIHGHUDOFRXUWVDUHWR
    XQUHDVRQDEO\ DSSOLHV WKDW SULQFLSOH WR WKH IDFWV RI WKH     JLYHGHIHUHQFHWRVWDWHWULDOFRXUWGHFLVLRQVUHJDUGLQJWKH
    SULVRQHUjVFDVH                                                    DSSOLFDWLRQRIVWDWHODZ6SHFLILFDOO\FODLPVEDVHGXSRQ
    *UHHUY0LWFKHOO                               1R       1R                             *UHHUY0LWFKHOO         

  RSLQLRQ RI WKH WULDO FRXUW LV FRPSOHWHO\ GHYRLG RI DQ\       86DW2j&RQQRUsVHHDOVR0DFKDFHNY
  UHIHUHQFHWRVXFKUHSRUW$FFRUGLQJO\WKHUHKDVEHHQQR             +RIEDXHU)GWK&LUFHUWGHQLHG
  VKRZLQJ WKDW WKH SUHSDUHG YLFWLP LPSDFW VWDWHPHQW               6&W
  SOD\HGDQ\SDUWLQWKHVHQWHQFLQJGHOLEHUDWLRQVRIHLWKHU
  MXGJHRUMXU\6WDWHY3RVW2KLR6WG                 )XUWKHUPRUHXQGHUWKH$('3$WKHGLVWULFWFRXUWPD\RQO\
    1(G    7KXV WKH WULDO FRXUW             KROG DQ HYLGHQWLDU\ KHDULQJ XQGHU WKH IROORZLQJ
  SUHVXPDEO\ FRQVLGHUHG RQO\ WKDW HYLGHQFH ZKLFK ZDV              FLUFXPVWDQFHV
  UHOHYDQWSUREDWLYHDQGFRPSHWHQWRQWKHLVVXH,GDW
  1(GDW                                                    ,QDSURFHHGLQJLQVWLWXWHGE\DQDSSOLFDWLRQIRUD
                                                                          ZULWRIKDEHDVFRUSXVE\DSHUVRQLQFXVWRG\SXUVXDQWWR
*UHHU2KLR6WGDW1(GDWIRRWQRWH                 WKHMXGJPHQWRID6WDWHFRXUWDGHWHUPLQDWLRQRIDIDFWXDO
DGGHG7KHGLVWULFWFRXUWREVHUYHGWKDWEHFDXVHWKH2KLR               LVVXH PDGH E\ D 6WDWH FRXUW VKDOO EH SUHVXPHG WR EH
6XSUHPH&RXUWIRXQGWKDWUHVMXGLFDWDEDUUHGFRQVLGHUDWLRQRI             FRUUHFW7KHDSSOLFDQWVKDOOKDYHWKHEXUGHQRIUHEXWWLQJ
WKHLVVXHLWVFRQVLGHUDWLRQZDVRXWVLGHWKHVFRSHRIIHGHUDO             WKHSUHVXPSWLRQRIFRUUHFWQHVVE\FOHDUDQGFRQYLQFLQJ
KDEHDVUHYLHZ                                                            HYLGHQFH
  :HDIILUPWKHGLVWULFWFRXUW                                             ,IWKHDSSOLFDQWKDVIDLOHGWRGHYHORSWKHIDFWXDO
                                                                          EDVLVRIDFODLPLQ6WDWHFRXUWSURFHHGLQJVWKHFRXUWVKDOO
++HDUVD\                                                              QRWKROGDQHYLGHQWLDU\KHDULQJRQWKHFODLPXQOHVVWKH
                                                                          DSSOLFDQWVKRZVWKDW
  3HWLWLRQHUFODLPVWKDWFHUWDLQRIWKHWULDOFRXUWjVUXOLQJVRQ
KHDUVD\REMHFWLRQVZHUHVLJQLILFDQWHQRXJKWRLPSOLFDWHWKH                 $WKHFODLPUHOLHVRQ
&RQIURQWDWLRQ&ODXVH7KHVHREMHFWLRQVRFFXUUHGGXULQJWKH
WHVWLPRQ\RI0UV0DORQHDQHLJKERUZLWKZKRP0U5RWK                          L D QHZ UXOH RI FRQVWLWXWLRQDO ODZ PDGH
KDGGLQHGRQWKHHYHQLQJRIKLVPXUGHU                                     UHWURDFWLYH WR FDVHV RQ FROODWHUDO UHYLHZ E\ WKH
                                                                            6XSUHPH&RXUWWKDWZDVSUHYLRXVO\XQDYDLODEOHRU
   7KHSURVHFXWLRQHOLFLWHGIURP0UV0DORQHWKDW0U5RWK
LQWHQGHG WR HYLFW SHWLWLRQHU  +RZHYHU D UHYLHZ RI WKH                 LLDIDFWXDOSUHGLFDWHWKDWFRXOGQRWKDYHEHHQ
UHOHYDQW SRUWLRQ RI WKH WUDQVFULSW UHYHDOV WKDW DOWKRXJK WKH       SUHYLRXVO\GLVFRYHUHGWKURXJKWKHH[HUFLVHRIGXH
WULDO FRXUW RYHUUXOHG WKH REMHFWLRQ 0UV 0DORQH ZDV                 GLOLJHQFHDQG
LQVWUXFWHGWKDWKHUWHVWLPRQ\PXVWmEHRI\RXURZQSHUVRQDO
NQRZOHGJHl                                                                 %WKHIDFWVXQGHUO\LQJWKHFODLPZRXOGEHVXIILFLHQW
                                                                          WRHVWDEOLVKE\FOHDUDQGFRQYLQFLQJHYLGHQFHWKDWEXWIRU
  6HFRQGGXULQJDFRQIHUHQFHLQFKDPEHUVGHIHQVHFRXQVHO                FRQVWLWXWLRQDOHUURUQRUHDVRQDEOHIDFWILQGHUZRXOGKDYH
LQGLFDWHG WKDW WKH\ ZLVKHG WR SXUVXH WKH IROORZLQJ OLQH RI       IRXQGWKHDSSOLFDQWJXLOW\RIWKHXQGHUO\LQJRIIHQVH
LQTXLU\
                                                                        86&H:LWKWKHVHSUHFHSWVLQPLQGZHWXUQWR
  :H NQRZ WKDW 5LWD 0DORQH PDGH D VWDWHPHQW WR DQ              WKHYH[LQJGRFWULQHRISURFHGXUDOGHIDXOW
  LQYHVWLJDWLQJRIILFHUZKHUHLQVKHVWDWHGWKDWVKHNQHZRQ
  WKHWKoVKHKDGDFRQYHUVDWLRQZLWK5RWKDQG5RWK
  WROG KHU TXRWH ZRUGV WR WKLV HIIHFW m5LFN LV EDFN LQ
     *UHHUY0LWFKHOO                                1R        1R                                  *UHHUY0LWFKHOO        

%3URFHGXUDO'HIDXOW                                                      LLQVWUXFWLRQVWKDWWKHWULDOFRXUWVKRXOGKDYHJLYHQ
  $VZLWKYLUWXDOO\DOOFDSLWDOFDVHVSHWLWLRQHUFKDOOHQJHVWKH            3HWLWLRQHUFRQFOXGHVE\DUJXLQJWKDWWKHWULDOFRXUWIDLOHGWR
GLVWULFWFRXUWjVFRQFOXVLRQWKDWPDQ\RIKLVFODLPVKDYHEHHQ             JLYH FHUWDLQ LQVWUXFWLRQV  7KHVH LQVWUXFWLRQV ZHUH QRW
SURFHGXUDOO\GHIDXOWHGGXHWRKLVIDLOXUHWRUDLVHWKHPDWWKH            UHTXHVWHGE\WULDOFRXQVHOKRZHYHUQRUZHUHWKH\UDLVHGRQ
DSSURSULDWHMXQFWXUHRIKLVVWDWHFRXUWSURFHHGLQJV                     GLUHFWDSSHDO
   $VWKHGLVWULFWFRXUWQRWHGHYHQFRQVWLWXWLRQDOHUURUVZLOO             $FFRUGLQJO\ZHILQGWKDWWKH\ZHUHSURFHGXUDOO\GHIDXOWHG
QRW EH QRWLFHG LI DQ DGHTXDWH DQG LQGHSHQGHQW VWDWHODZ
JURXQGH[LVWVIRUXSKROGLQJWKHFRQYLFWLRQRUVHQWHQFH6HH              *9LFWLP,PSDFW6WDWHPHQW
&ROHPDQY7KRPSVRQ860DXSLQ
Y 6PLWK  )G   WK &LU   7KLV FRXUWjV        3HWLWLRQHU FRQWHQGV WKDW WKH WULDO FRXUW UHFHLYHG D YLFWLP
0DXSLQGHFLVLRQVHWVRXWIRXULQTXLULHVWKDWDGLVWULFWFRXUW             LPSDFWVWDWHPHQWLQYLRODWLRQRIWKH(LJKWK$PHQGPHQW%XW
VKRXOGPDNHZKHQWKHVWDWHDUJXHVWKDWDKDEHDVFODLPKDV                 VHH 3D\QH Y 7HQQHVVHH  86   RYHUUXOLQJ
EHHQ GHIDXOWHG E\ SHWLWLRQHUjV IDLOXUH WR REVHUYH D VWDWH         HDUOLHUSUHFHGHQWDQGKROGLQJWKDWYLFWLPLPSDFWVWDWHPHQWV
SURFHGXUDOUXOH)LUVWWKHFRXUWPXVWGHWHUPLQHZKHWKHUWKHUH           FDQSOD\DUROHLQWKHVHQWHQFLQJSKDVHRIDFDSLWDOWULDO7KLV
LV VXFK D SURFHGXUDO UXOH WKDW LV DSSOLFDEOH WR WKH FODLP DW   VWDWHPHQWZDVQHYHUVKRZQWRWKHMXU\DQGQRZKHUHGRHVWKH
LVVXHDQGZKHWKHUWKHSHWLWLRQHUGLGLQIDFWIDLOWRIROORZLW         WULDO FRXUW UHIHU WR LW DV SOD\LQJ D UROH LQ WKH LPSRVLWLRQ RI
0DXSLQ  )G DW   6HFRQG WKH FRXUW PXVW GHFLGH         SHWLWLRQHUjVVHQWHQFH
ZKHWKHU WKH VWDWH FRXUWV DFWXDOO\ HQIRUFHG LWV SURFHGXUDO
VDQFWLRQ,G7KLUGWKHFRXUWPXVWGHFLGHZKHWKHUWKHVWDWHjV            3HWLWLRQHUILUVWUDLVHGWKLVLVVXHLQKLVGLUHFWDSSHDOWRWKH
SURFHGXUDO IRUIHLWXUH LV DQ mDGHTXDWH DQG LQGHSHQGHQWl              2KLR 6XSUHPH &RXUW ZKLFK UHMHFWHG WKH FODLP IRU WKHVH
JURXQGRQZKLFKWKHVWDWHFDQUHO\WRIRUHFORVHUHYLHZRID               UHDVRQV
IHGHUDO FRQVWLWXWLRQDO FODLP  m7KLV TXHVWLRQ ZLOO XVXDOO\
LQYROYHDQH[DPLQDWLRQRIWKHOHJLWLPDWHVWDWHLQWHUHVWVEHKLQG                $SSHOODQW DOVRDVVHUWVLQSURSRVLWLRQRIODZQXPEHU
WKH SURFHGXUDO UXOH LQ OLJKW RI WKH IHGHUDO LQWHUHVW LQ            ILIWHHQWKDWDYLFWLPLPSDFWVWDWHPHQWZDVXWLOL]HGLQWKH
FRQVLGHULQJIHGHUDOFODLPVl,G$QGIRXUWKWKHSHWLWLRQHU              WULDOFRXUWjVVHQWHQFLQJFRQVLGHUDWLRQVLQYLRODWLRQRIWKH
PXVWGHPRQVWUDWHFRQVLVWHQWZLWK:DLQZULJKWY6\NHV                  UHFHQWSURQRXQFHPHQWFRQWDLQHGLQ%RRWKY0DU\ODQG
86WKDWWKHUHZDVmFDXVHlIRUKLPWRQHJOHFWWKH               866&W/(GG
SURFHGXUDO UXOH DQG WKDW KH ZDV DFWXDOO\ SUHMXGLFHG E\ WKH         7KLVSURSRVLWLRQRIODZZDVQHLWKHUEULHIHGQRUDUJXHG
DOOHJHGFRQVWLWXWLRQDOHUURU,GVHHDOVR6FRWWY0LWFKHOO             EHIRUHWKHFRXUWRIDSSHDOV,WLVDFFRUGLQJO\ZDLYHGDQG
 )G   WK &LU FHUW GHQLHG  6&W          RXUFRQVLGHUDWLRQWKHUHRILVEDUUHGE\WKHGRFWULQHRIUHV
                                                                     MXGLFDWD

   )XUWKHUPRUHHYHQZKHQDSHWLWLRQHUIDLOV WRVKRZFDXVH                    %\ZD\RIFRPPHQWDU\RQO\ZHQRWHWKDWWKHUHSRUWDW
DQG SUHMXGLFH D FRXUW PXVW VWLOO FRQVLGHU ZKHWKHU VSHFLDO          LVVXH ZDV SUHSDUHG  +RZHYHU DW QR WLPH ZDV LW HYHU
FLUFXPVWDQFHV UHTXLUH WKDW WKDW VKRZLQJ EH ZDLYHG                    HQWHUHG LQWR HYLGHQFH  ,W ZDV QRW JLYHQ WR WKH MXU\ RU
6SHFLILFDOO\DFRXUWPD\QRWLFHDQRWKHUZLVHGHIDXOWHGFODLP               VSHFLILFDOO\ FRPPHQWHG XSRQ LQ WKHLU SUHVHQFH  7KH
LI LW FRQFOXGHV WKDW SHWLWLRQHU KDV VKRZQ E\ FOHDU DQG
FRQYLQFLQJ HYLGHQFH WKDW EXW IRU FRQVWLWXWLRQDO HUURU QR
                                                                              
                                                                               7KH 6XSUHPH &RXUW H[SOLFLWO\ RYHUUXOHG %RRWK LQ 3D\QH VXSUD
    *UHHUY0LWFKHOO                            1R      1R                               *UHHUY0LWFKHOO       

  HV\PSDWK\LQVWUXFWLRQ                                          UHDVRQDEOHMXURUZRXOGKDYHIRXQGKLPJXLOW\RIWKHFULPHRU
                                                                    LIWKHFRQVWLWXWLRQDOHUURURFFXUUHGGXULQJWKHSHQDOW\SKDVHRI
   7KHFRXUWDOVRWROGWKHMXU\m<RXPXVWQRWEHLQIOXHQFHG        WKH WULDO WKDW QR UHDVRQDEOH MXURU ZRXOG KDYH VHQWHQFHG
E\DQ\FRQVLGHUDWLRQRIV\PSDWK\RUSUHMXGLFHl3HWLWLRQHU         SHWLWLRQHUWRGHDWK6HH6DZ\HUY:KLWOH\86
FRQWHQGVWKDWV\PSDWK\LVDOHJLWLPDWHFRQVLGHUDWLRQLQFDSLWDO     
FDVHV$VDOUHDG\GLVFXVVHGWKLVFRXUWKDVSUHYLRXVO\QRWHG
mDQLQVWUXFWLRQWKDWWKHMXU\VKRXOGQRWEHVZD\HGE\µPHUH           )RULWVSDUW2KLRKDVWKHIROORZLQJORQJVWDQGLQJUXOH
VHQWLPHQWFRQMHFWXUHV\PSDWK\SDVVLRQSUHMXGLFHSXEOLF
RSLQLRQRUSXEOLFIHHOLQJjlLVFRQVWLWXWLRQDO0DSHV)G       &RQVWLWXWLRQDO LVVXHV FDQQRW EH FRQVLGHUHG LQ
DW                                                              SRVWFRQYLFWLRQ SURFHHGLQJV XQGHU 6HFWLRQ  HW
                                                                      VHT 5HYLVHG &RGH ZKHUH WKH\ KDYH DOUHDG\ EHHQ RU
  ITXDQWLW\RIDJJUDYDWLQJFLUFXPVWDQFHV                           FRXOG KDYH EHHQ IXOO\ OLWLJDWHG E\ WKH SULVRQHU ZKLOH
                                                                      UHSUHVHQWHG E\ FRXQVHO HLWKHU EHIRUH KLV MXGJPHQW RI
  $VDOUHDG\TXRWHGWKHFRXUWWROGWKHMXU\m,WLVQRWRQO\WKH     FRQYLFWLRQRURQGLUHFWDSSHDOIURPWKDWMXGJPHQWDQG
TXDQWLW\RIDJJUDYDWLQJFLUFXPVWDQFHVYHUVXVWKHTXDQWLW\RI          WKXVKDYHEHHQDGMXGLFDWHGDJDLQVWKLP
WKH PLWLJDWLQJ IDFWRUV ZKLFK LV WR EH WKH EDVLV RI \RXU
GHFLVLRQ7KHTXDOLW\RULPSRUWDQFHRIWKHPLWLJDWLQJIDFWRUV      6WDWHY3HUU\2KLR6WG1(G 2KLR
DQGWKHDJJUDYDWLQJFLUFXPVWDQFHVPXVWDOVREHFRQVLGHUHGl          V\OODEXV  0RUHRYHU WKLV FRXUW KDV UHMHFWHG
,Q SHWLWLRQHUjV YLHZ EHFDXVH WKH VWDWH RQO\ SURYHG RQH     FRQWHQWLRQV WKDW 2KLR KDV IDLOHG WR DSSO\ LWV 3HUU\ UXOH
DJJUDYDWLQJ FLUFXPVWDQFH WKLV LQVWUXFWLRQ ZRUNHG WR KLV      FRQVLVWHQWO\0DSHVY&R\OH)GWK&LU
GLVDGYDQWDJH                                                       
  7KLVLVVXHKDVEHHQSURFHGXUDOO\GHIDXOWHG                         2I FRXUVH m>Z@KHWKHU D VWDWH FRXUW UHVWHG LWV KROGLQJ RQ
                                                                    SURFHGXUDO GHIDXOW VR DV WR EDU IHGHUDO KDEHDV UHYLHZ LV D
  JXQDQLPLW\LQVWUXFWLRQ                                         TXHVWLRQRIODZWKDWZHUHYLHZGHQRYRl&RPEVY&R\OH
                                                                     )G   WK &LU FHUW GHQLHG  6&W 
  3HWLWLRQHUDUJXHVWKDWWKHWULDOFRXUWLPSOLHGWKDWWKHMXU\      :HORRNWRWKHODVWH[SODLQHGVWDWHFRXUWMXGJPHQW
PXVWEHXQDQLPRXVZKHQLPSRVLQJDOLIHVHQWHQFHZKHQLQ            ZKHQDQVZHULQJWKLVTXHVWLRQ,GFLWLQJ<OVWY1XQQHPDNHU
IDFWXQDQLPLW\LVUHTXLUHGRQO\IRUDGHDWKYHUGLFW              86
  7KLVLVVXHKDVEHHQSURFHGXUDOO\GHIDXOWHG                                                      ,,,
  KXQDQLPLW\EHIRUHFRQVLGHULQJOLIH                               :LWKWKLVJHQHUDOXQGHUVWDQGLQJRISURFHGXUDOGHIDXOWE\
                                                                    ZD\ RI EDFNJURXQG ZH QRZ WXUQ WR WKH LQGLYLGXDO FODLPV
  3HWLWLRQHUQH[WDUJXHVWKDWWKHMXU\LQVWUXFWLRQVOHGWKHMXU\    UDLVHGE\SHWLWLRQHU
WREHOLHYHWKDWLWPXVWXQDQLPRXVO\UHMHFWDGHDWKVHQWHQFH
EHIRUHLWFRXOGFRQVLGHUOLIH                                     $,QHIIHFWLYH$VVLVWDQFHRI7ULDO&RXQVHO
  7KLVLVVXHKDVEHHQSURFHGXUDOO\GHIDXOWHG                         7KHPRVWWURXEOHVRPHDVSHFWRIFDSLWDOFDVHVRIWHQLQYROYHV
                                                                    FODLPVRILQHIIHFWLYHDVVLVWDQFHRIFRXQVHO7KLVFDVHLVQR
                                                                    GLIIHUHQW7KHTXHVWLRQRIFRXUVHLVQRWZKHWKHUFRXQVHOZDV
    *UHHUY0LWFKHOO                             1R     1R                               *UHHUY0LWFKHOO      

WRSQRWFK EXW ZKHWKHU KH RU VKH IXQFWLRQHG DW WKH OHYHO    IRUWKHSURSRVLWLRQWKDWWKH6WDWHFDQQRWVHHNWRPLQLPL]HWKH
UHTXLUHGE\WKH6L[WK$PHQGPHQW                                    MXU\jV VHQVH RI UHVSRQVLELOLW\ IRU GHWHUPLQLQJ WKH
                                                                    DSSURSULDWHQHVVRIGHDWK+RZHYHUDVGLVFXVVHGHDUOLHUWKH
  :HDSSO\DWZRSDUWWHVWWRGHWHUPLQHZKHWKHUDFULPLQDO          WULDOFRXUWjVLQVWUXFWLRQUHSUHVHQWVDFRUUHFWVWDWHPHQWRI2KLR
  GHIHQGDQW ZDV GHQLHG HIIHFWLYH DVVLVWDQFH RI FRXQVHO       ODZ
  )LUVWZHDVFHUWDLQZKHWKHUFRXQVHOjVSHUIRUPDQFHZDV
  SURIHVVLRQDOO\GHILFLHQWVHFRQGZHGHWHUPLQHZKHWKHU              FUHDVRQDEOHGRXEW
  WKH GHILFLHQW SHUIRUPDQFH SUHMXGLFHG WKH GHIHQGDQWjV
  FRQVWLWXWLRQDOLQWHUHVWV6HH6WULFNODQGY:DVKLQJWRQ            3HWLWLRQHU FRQWHQGV WKDW E\ LQVWUXFWLQJ WKH MXURUV RQ
   86    6&W   /(GG         UHDVRQDEOH GRXEW LQ WKH SHQDOW\ SKDVH WKH WULDO FRXUW
  5LFNPDQY%HOO)GWK&LU            mHVWDEOLVKHGDQXQFRQVWLWXWLRQDOSUHVXPSWLRQRIWKHSURSULHW\
   *UDYOH\ Y 0LOOV  )G   WK &LU      RI WKH GHDWK VHQWHQFHl EHFDXVH WKH MXU\ KDG DOUHDG\ IRXQG
                                                              SHWLWLRQHUJXLOW\EH\RQGDUHDVRQDEOHGRXEWDWWKHJXLOWSKDVH
                                                                    2QFHDJDLQQRREMHFWLRQZDVPDGHDWWULDO
     ,Q DVVHVVLQJ FRXQVHOjV SHUIRUPDQFH ZH LQTXLUH
  ZKHWKHUmFRXQVHOjVUHSUHVHQWDWLRQIHOOEHORZDQREMHFWLYH           7KLVLVVXHKDVEHHQSURFHGXUDOO\GHIDXOWHG
  VWDQGDUGRIUHDVRQDEOHQHVVlDVPHDVXUHGE\mSUHYDLOLQJ
  SURIHVVLRQDOQRUPVl5LFNPDQ)GDWTXRWLQJ             GRXWZHLJK
  6WULFNODQG86DW6&W7KLV
  REMHFWLYHUHDVRQDEOHQHVVVWDQGDUGHQFRPSDVVHVVWUDWHJLF             7KH FRXUW DOVR LQVWUXFWHG WKH MXU\ RQ KRZ WR mZHLJKl
  OLWLJDWLRQ FKRLFHV WKDW VLPSO\ IDLO WR EHDU IUXLW 6HH    DJJUDYDWLQJDQGPLWLJDWLQJIDFWRUV
  6WULFNODQG86DW6&W7RHVWDEOLVK
  SUHMXGLFH D GHIHQGDQW PXVW GHPRQVWUDWH D UHDVRQDEOH          2XWZHLJK7RRXWZHLJKPHDQVWRZHLJKPRUHWKDQWREH
  SUREDELOLW\WKDWmEXWIRUFRXQVHOjVXQSURIHVVLRQDOHUURUV          PRUHLPSRUWDQWWKDQ7KHH[LVWHQFHRIPLWLJDWLQJIDFWRUV
  WKHUHVXOWRIWKHSURFHHGLQJZRXOGKDYHEHHQGLIIHUHQWl            GRHV QRW SUHFOXGH RU SUHYHQW WKH GHDWK VHQWHQFH LI WKH
  5LFNPDQ)GDWTXRWLQJ6WULFNODQG86             DJJUDYDWLQJ FLUFXPVWDQFHV RXWZHLJK WKH PLWLJDWLQJ
  DW6&W                                         IDFWRUV

2OGHQY8QLWHG6WDWHV)GWK&LU              ,W LV WKH TXDOLW\ RI WKH HYLGHQFH WKDW PXVW EH JLYHQ
                                                                      SULPDU\ FRQVLGHUDWLRQ E\ \RX  7KH TXDOLW\ RI WKH
  %HIRUH ORRNLQJ DW WKH PHULWV RI SHWLWLRQHUjV LQHIIHFWLYH     HYLGHQFHPD\RUPD\QRWEHFRPSHQVXUDWH>VLF@ZLWKWKH
DVVLVWDQFHFODLPKRZHYHUZHPXVWILUVWGHWHUPLQHZKHWKHU            TXDQWLW\RIWKHHYLGHQFHWKDWLVWKHQXPEHURIZLWQHVVHV
WKHLVVXHKDVEHHQSURFHGXUDOO\GHIDXOWHG8QOLNHWKHIHGHUDO        RUH[KLELWVSUHVHQWHGLQWKLVFDVH
V\VWHP 2KLR FRXUWV JHQHUDOO\ UHTXLUH GHIHQGDQWV WR UDLVH
LQHIIHFWLYHDVVLVWDQFHRIWULDOFRXQVHORQGLUHFWDSSHDO           2QFHDJDLQQRREMHFWLRQZDVPDGHDWWULDOQRUZDVWKHLVVXH
                                                                    UDLVHGRQGLUHFWDSSHDO
  :KHUH D GHIHQGDQW UHSUHVHQWHG E\ QHZ FRXQVHO XSRQ
  GLUHFWDSSHDOIDLOVWRUDLVHWKHUHLQWKHLVVXHRIFRPSHWHQW        7KLVLVVXHKDVEHHQSURFHGXUDOO\GHIDXOWHG
  WULDO FRXQVHO DQG VDLG LVVXH FRXOG IDLUO\ KDYH EHHQ
  GHWHUPLQHGZLWKRXWUHVRUWWRHYLGHQFHGHKRUVWKHUHFRUG
   *UHHUY0LWFKHOO                            1R      1R                                 *UHHUY0LWFKHOO       

  ELQVWUXFWLRQRQWKHIW                                           UHVMXGLFDWDLVDSURSHUEDVLVIRUGLVPLVVLQJGHIHQGDQWjV
                                                                     SHWLWLRQIRUSRVWFRQYLFWLRQUHOLHI
  3HWLWLRQHUIHHOVWKDWWKHWULDOFRXUWVKRXOGKDYHLQVWUXFWHG
WKHMXU\RQWKHIWDVDQDOWHUQDWLYHWRDJJUDYDWHGUREEHU\7KH    6WDWH Y &ROH  2KLR 6W G   1(G  
UHFRUGUHYHDOVWKDWQRUHTXHVWIRUWKLVLQVWUXFWLRQZDVPDGHE\    V\OODEXV,QWKHSUHVHQWFDVHDSSHOODWHFRXQVHOIDLOHGWRUDLVH
FRXQVHODQGWKH2KLR6XSUHPH&RXUWWKHUHIRUHUHYLHZHGIRU          WKH LQHIIHFWLYH DVVLVWDQFH RI WULDO FRXQVHO RQ GLUHFW DSSHDO
SODLQHUURUDQGIRXQGQRQH*UHHU2KLR6WGDW      7KHLVVXHZDVILUVWUDLVHGE\FRXQVHOLQDSHWLWLRQIRUSRVW
1(GDW                                                 FRQYLFWLRQUHOLHI7KHWULDOFRXUWDQG&RXUWRI$SSHDOVHDFK
                                                                   KHOGWKDWWKHFODLPZDVEDUUHGE\WKHGRFWULQHRIUHVMXGLFDWD
 :HDIILUPEDVHGXSRQWKHUHDVRQLQJRIWKH2KLR6XSUHPH            EHFDXVHSHWLWLRQHUKDGQRWUDLVHGKLVFODLPRQGLUHFWDSSHDO
&RXUW                                                             6HH'HFLVLRQDQG(QWU\2KLR&W$SS1RDW
                                                                   s$ DW   7KH GLVWULFW FRXUW DJUHHG ZLWK WKLV
  3HQDOW\3KDVH,QVWUXFWLRQV                                   UHDVRQLQJ0HPRUDQGXPRI2SLQLRQ$XJXVWDW
                                                                   s$DW
  DEXUGHQRISURRILQVWUXFWLRQ
                                                                      7KHGLVWULFWFRXUWjVGHFLVLRQRQWKLVLVVXHJLYHVULVHWRWKH
  7KHFRXUWLQVWUXFWHGWKHMXU\DVIROORZV                        IROORZLQJUHVHUYDWLRQ&ROHPDNHVDQH[FHSWLRQIRUFDVHVLQ
                                                                   ZKLFKWKHFRPSHWHQFHRIWULDOFRXQVHOFDQRQO\EHUHVROYHGE\
    7KHEXUGHQRISURRI7KH6WDWHRI2KLRKDVWKHEXUGHQ         UHVRUWLQJ WR HYLGHQFH RXWVLGH WKH UHFRUG  7KH SHWLWLRQ IRU
  RI SURYLQJ EH\RQG D UHDVRQDEOH GRXEW WKDW WKH             SRVWFRQYLFWLRQUHOLHILQFOXGHVIRUW\VL[H[KLELWVWKHPDMRULW\
  DJJUDYDWLQJFLUFXPVWDQFHVZKLFKWKH'HIHQGDQW3DXO:           RIZKLFKZHUHDIILGDYLWVIURPLQGLYLGXDOVZKRDOOHJHGO\KDG
  *UHHUZDVIRXQGJXLOW\RIFRPPLWWLQJDUHVXIILFLHQWWR          LQIRUPDWLRQ IDYRUDEOH WR SHWLWLRQHU EXW ZKR ZHUH QRW
  RXWZHLJKWKHIDFWRUVLQPLWLJDWLRQRIWKHLPSRVLWLRQRI          FRQWDFWHGE\WULDOFRXQVHO7KH\LQFOXGHIDPLO\PHPEHUVZKR
  WKHVHQWHQFHRIGHDWK                                           DWWHVWWKDWWKH\FRXOGKDYHSODFHGSHWLWLRQHUjVSHUVRQDOKLVWRU\
    7KH'HIHQGDQWVKDOOKDYHWKHEXUGHQRIJRLQJIRUZDUG           DQGFKDUDFWHULQDIDYRUDEOHFRQWH[W/DUU\'HKXVDQH[SHUW
  ZLWK HYLGHQFH RI DQ\ IDFWRUV LQ PLWLJDWLRQ RI WKH        ZKR ZRXOG KDYH GLVSXWHG WKH VWDWHjV HYLGHQFH UHJDUGLQJ
  LPSRVLWLRQRIWKHVHQWHQFHRIGHDWK                             EORRG\ IRRWSULQWV IRXQG QHDU WKH YLFWLPjV ERG\ sDPHV
                                                                   (LVHQEHUJ D SV\FKRORJLVW ZKR ZRXOG KDYH WHVWLILHG
1RREMHFWLRQZDVPDGHE\FRXQVHO1RWRQO\GRZHILQGQR          FRQFHUQLQJWKHVKRUWFRPLQJVRIWULDOFRXQVHOVjSUHSDUDWLRQIRU
HUURUZLWKWKLVLQVWUXFWLRQLWKDVEHHQSURFHGXUDOO\GHIDXOWHG   PLWLJDWLRQWULDOFRXQVHOZKRLQGLFDWHWKDWWKHLUQRWHVUHYHDO
                                                                   WKDWFHUWDLQMXURUVH[FXVHGE\WKHSURVHFXWLRQZHUHEODFNDQG
  EQRQELQGLQJQDWXUHRIMXU\UHFRPPHQGDWLRQ                    DMXURUZKRVWDWHVWKDWHYLGHQFHRISHWLWLRQHUjVEDFNJURXQG
                                                                   ZRXOGKDYHmEHHQKHOSIXODQGPD\KDYHDIIHFWHGWKHMXU\jV
  3HWLWLRQHU REMHFWV WR WKLV LQVWUXFWLRQ m$ MXU\            GHFLVLRQl
UHFRPPHQGDWLRQ WR WKH &RXUW WKDW WKH GHDWK SHQDOW\ EH
LPSRVHGLVMXVWWKDWDUHFRPPHQGDWLRQDQGLWLVQRWELQGLQJ
XSRQWKH&RXUW7KHILQDOGHFLVLRQDVWRZKHWKHUWKHGHDWK
SHQDOW\VKDOOEHLPSRVHGXSRQWKH'HIHQGDQWUHVWVXSRQWKH
                                                                       
&RXUWl3HWLWLRQHUFRQWHQGVWKDWWKLVLQVWUXFWLRQUXQVDIRXORI        7KH SRVWFRQYLFWLRQ SHWLWLRQ ZDV ILOHG E\ 6FRWW sHOHQ DQ DVVLVWDQW

&DOGZHOOY0LVVLVVLSSL86ZKLFKVWDQGV         VWDWH SXEOLF GHIHQGHU ZKR KDG DVVXPHG WKH UHSUHVHQWDWLRQ RI SHWLWLRQHU
                                                                   IURP FRXUWDSSRLQWHG DSSHOODWH FRXQVHO
    *UHHUY0LWFKHOO                               1R       1R                              *UHHUY0LWFKHOO      

  :KLOHWKHSUREDWLYHYDOXHRIWKLVHYLGHQFHLVGLIILFXOWWR              GHWHUPLQDWLRQV RI MXURU ELDV FDQQRW EH UHGXFHG WR
DVVHVVLQUHWURVSHFWLWVHHPVFOHDUWKDWWKLVPDWHULDODQGWKH           TXHVWLRQDQGDQVZHUVHVVLRQVZKLFKREWDLQUHVXOWVLQWKH
DUJXPHQWV WKDW ORJLFDOO\ IORZ IURP LW DUH RXWVLGH WKH WULDO      PDQQHU RI D FDWHFKLVP  :KDW FRPPRQ VHQVH VKRXOG
UHFRUG1RQHWKHOHVVWKH2KLR&RXUWRI$SSHDOVUHDFKHGD                 KDYHUHDOL]HGH[SHULHQFHKDVSURYHGPDQ\YHQLUHPHQ
FRQWUDU\FRQFOXVLRQ                                                      VLPSO\FDQQRWEHDVNHGHQRXJKTXHVWLRQVWRUHDFKWKH
                                                                          SRLQW ZKHUH WKHLU ELDV KDV EHHQ PDGH mXQPLVWDNDEO\
     7KHJLVWRI*UHHUjVFODLPLVWKDWKLVUHSUHVHQWDWLRQZDV             FOHDUl WKHVH YHQLUHPHQ PD\ QRW NQRZ KRZ WKH\ ZLOO
  LQHIIHFWLYH LQ IDLOLQJ WR UDLVH WKHVH LVVXHV DQGRU EULQJ       UHDFWZKHQIDFHGZLWKLPSRVLQJWKHGHDWKVHQWHQFHRU
  IRUWK WKLV HYLGHQFH DW WULDO  %\ FODLPLQJ WKDW WKLV           PD\EHXQDEOHWRDUWLFXODWHRUPD\ ZLVKWRKLGHWKHLU
  HYLGHQFH LV GHKRUV WKH UHFRUG *UHHU DWWHPSWV WR                 WUXHIHHOLQJV'HVSLWHWKLVODFNRIFODULW\LQWKHSULQWHG
  FLUFXPYHQWWKHDSSOLFDWLRQRIUHVMXGLFDWD%XWKHIDLOV               UHFRUGKRZHYHUWKHUHZLOOEHVLWXDWLRQVZKHUHWKHWULDO
  WR XQGHUVWDQG WKDW HYLGHQFH LV QRW RXWVLGH WKH UHFRUG           MXGJH LV OHIW ZLWK WKH GHILQLWH LPSUHVVLRQ WKDW D
  VLPSO\ EHFDXVH LW ZDV QRW UDLVHG LQ WKH RULJLQDO                SURVSHFWLYH MXURU ZRXOG EH XQDEOH WR IDLWKIXOO\ DQG
  SURFHHGLQJV7KHPDWWHUV*UHHUUDLVHVZHUHFDSDEOHRI                  LPSDUWLDOO\DSSO\WKHODZ
  EHLQJUDLVHGDQGUHYLHZHGLQKLVGLUHFWDSSHDO
                                                                        :DLQZULJKWY:LWW86DWIRRWQRWHVRPLWWHG
6WDWHY*UHHU1R:/2KLR&W$SS                1RWKLQJLQ:LWWVXSSRUWVSHWLWLRQHUjVSRVLWLRQWKDWWKHFRXUW
2FW   s$ DW  FLWDWLRQV RPLWWHG            PXVWSUHFLVHO\SKUDVHLWVLQVWUXFWLRQVWRDSRWHQWLDOMXURUWR
$OWKRXJKFRXQVHOFRXOGFHUWDLQO\KDYHUDLVHGDQLQHIIHFWLYH             LQFOXGHWKHZRUGmFRQVLGHUl,QRXUYLHZWKHFRXUWIROORZHG
DVVLVWDQFH RI FRXQVHO FODLP RQ GLUHFW DSSHDO WKH SUHFLVH       WKHFRUUHFWVWDQGDUGLWDWWHPSWHGWRGLVFHUQGXULQJYRLUGLUH
DUJXPHQWVDGYDQFHGLQKLVSHWLWLRQIRUSRVWFRQYLFWLRQUHOLHI           ZKHWKHUDSURVSHFWLYHMXURUFRXOGIROORZWKHODZZLWKUHVSHFW
UHTXLUHVLJQLILFDQWVXSSOHPHQWDWLRQRIWKHWULDOFRXUWUHFRUG          WRWKHGHDWKSHQDOW\
7KH 2KLR &RXUW RI $SSHDOV UHOLHV RQ D VLQJOH XQUHSRUWHG
FDVH6WDWHY:D\QH:/2KLR&W$SS6HSW               )sXU\,QVWUXFWLRQV
WRVXSSRUWLWVVWDWHPHQWWKDWmHYLGHQFHLVQRWRXWVLGH
WKH UHFRUG VLPSO\ EHFDXVH LW ZDV QRW UDLVHG LQ WKH RULJLQDO     3HWLWLRQHUUDLVHVQXPHURXVFKDOOHQJHVWRMXU\LQVWUXFWLRQV
SURFHHGLQJl<HWLQ:D\QHWKHDSSHOODQWQHJOHFWHGWRWDNH
D GLUHFW DSSHDO DQG LQVWHDG UDLVHG WKH FODLP WKDW KLV SOHD      *XLOW3KDVH,QVWUXFWLRQV
DJUHHPHQWGLGQRWFRQIRUPWRWKHLQGLFWPHQWLQDSHWLWLRQIRU
SRVWFRQYLFWLRQ UHOLHI  &HUWDLQO\ SURFHGXUDO GHIDXOW XQGHU         DPXUGHULQVWUXFWLRQ
WKRVHFLUFXPVWDQFHVLVZDUUDQWHGEHFDXVHWKHGRFXPHQWVLQ
TXHVWLRQWKHSOHDDJUHHPHQWDQGLQGLFWPHQWZHUHLQWKH              $FFRUGLQJWRSHWLWLRQHUWKHGLVWULFWFRXUWHUUHGLQJLYLQJ
UHFRUG  ,Q WKLV FDVH KRZHYHU SRWHQWLDO HYLGHQFH IURP         WKLV LQVWUXFWLRQ m,Q WKH HYHQW \RX ILQG WKH 'HIHQGDQW QRW
ZLWQHVVHV ZKR QHYHU DSSHDUHG DW WULDO DV ZHOO DV WKH          JXLOW\RIDJJUDYDWHGPXUGHU\RXZLOOIXUWKHUFRQWLQXHDQG
WHVWLPRQ\ RI WULDO FRXQVHO UHVSHFWLQJ WULDO WDFWLFV LV E\      FRQVLGHU WKH OHVVHU LQFOXGHG RIIHQVH RI PXUGHUl  1R
GHILQLWLRQGHKRUVWKHUHFRUG)RUWKDWUHDVRQLWVHHPVWKDWWKH       FRQWHPSRUDQHRXV REMHFWLRQ ZDV PDGH QRU ZDV WKH LVVXH
2KLR &RXUW RI $SSHDOV PD\ KDYH PLVWDNHQO\ UHOLHG XSRQ           UDLVHGRQGLUHFWDSSHDO,WZDVKRZHYHULQFOXGHGLQWKHSRVW
SURFHGXUDO GHIDXOW LQ GHQ\LQJ SHWLWLRQHUjV LQHIIHFWLYH             FRQYLFWLRQSHWLWLRQ
DVVLVWDQFHRIWULDOFRXQVHOFODLP                                        7KLVFODLPKDVEHHQSURFHGXUDOO\GHIDXOWHG
    *UHHUY0LWFKHOO                                 1R       1R                               *UHHUY0LWFKHOO      

LQWHUFHGHLQWKLVVLWXDWLRQGHSULYHG0U*UHHURIDIDLUMXU\                'HVSLWH WKHVH UHVHUYDWLRQV WKH SURFHGXUDO GHIDXOW UXOH
WULDOl                                                                 GHOLQHDWHG E\ 3HUU\ DQG &ROH LV D PDWWHU RI VWDWH ODZ
                                                                          *HQHUDOO\DIHGHUDOKDEHDVFRXUWVLWWLQJLQUHYLHZRIDVWDWH
  7KLVFODLPZDVOLNHZLVHSURFHGXUDOO\GHIDXOWHG                         FRXUW MXGJPHQW VKRXOG QRW VHFRQG JXHVV D VWDWH FRXUWjV
                                                                          GHFLVLRQFRQFHUQLQJPDWWHUVRIVWDWHODZ*DOOY3DUNHU
  TXHVWLRQLQJRIMXURUVDERXWGHDWKSHQDOW\                           )G   WK &LU  m3ULQFLSOHV RI FRPLW\ DQG
                                                                          ILQDOLW\HTXDOO\FRPPDQGWKDWDKDEHDVFRXUWFDQQRWUHYLVLW
  ,Q H[SODLQLQJ WKH GXW\ RI WKH MXU\ LQ D FDSLWDO FDVH WR D   DVWDWHFRXUWjVLQWHUSUHWDWLRQRIVWDWHODZDQGLQSDUWLFXODU
SURVSHFWLYHMXURUWKHWULDOFRXUWSRVHGWKLVTXHVWLRQ                   LQVWUXFWWKDWDKDEHDVFRXUWDFFHSWWKHLQWHUSUHWDWLRQRIVWDWH
                                                                          ODZ E\ WKH KLJKHVW VWDWH FRXUW RQ D SHWLWLRQHUjV GLUHFW
  >,@IWKHMXU\ILQGVWKH6WDWHGLGSURYHEH\RQGDUHDVRQDEOH             DSSHDOl1HYHUWKHOHVVZKHQWKHUHFRUGUHYHDOVWKDWWKHVWDWH
  GRXEW WKH DJJUDYDWLQJ IDFWRUV RXWZHLJK WKH PLWLJDWLQJ             FRXUWjV UHOLDQFH XSRQ LWV RZQ UXOH RI SURFHGXUDO GHIDXOW LV
  IDFWRUV\RXZLOOWKHQEHUHTXLUHGWRUHFRPPHQGWRWKH                  PLVSODFHG ZH DUH UHOXFWDQW WR FRQFOXGH FDWHJRULFDOO\ WKDW
  &RXUWWKDWWKH'HIHQGDQWUHFHLYHWKHGHDWKVHQWHQFH                    IHGHUDOKDEHDVUHYLHZRIWKHSXUSRUWHGO\GHIDXOWHGFODLPLV
    ,I\RXILQG\RXUVHOILQWKDWVLWXDWLRQFRXOG\RXPDNH                SUHFOXGHG$VH[SODLQHGEHORZKRZHYHUZHQHHGQRWGHFLGH
  VXFK D UHFRPPHQGDWLRQ WR WKH &RXUW"  7KDW                        WKHH[WHQWWRZKLFKLIDQ\IHGHUDOFRXUWVPD\UHDFKWKHPHULWV
  UHFRPPHQGDWLRQ EHLQJ FRXOG \RX PDNH WKH                           RIFRQVWLWXWLRQDOFODLPVWKDWDVWDWHFRXUWLPSURSHUO\IRXQGWR
  UHFRPPHQGDWLRQ WKDW WKH 'HIHQGDQW UHFHLYH WKH GHDWK               EH SURFHGXUDOO\ GHIDXOWHG EHFDXVH SHWLWLRQHUjV LQHIIHFWLYH
  SHQDOW\"                                                                DVVLVWDQFHRIDSSHOODWHFRXQVHOFODLPQHFHVVDULO\IRUFHVXVWR
                                                                          UHYLHZWKHSHUIRUPDQFHRIWULDOFRXQVHO
3HWLWLRQHU FRQWHQGV WKDW WKH FRXUW PLVVWDWHV WKH VWDQGDUG         %,QHIIHFWLYH$VVLVWDQFHRI$SSHOODWH&RXQVHO
ZKLFKVKRXOGEHZKHWKHUDMXURUZRXOGFRQVLGHULPSRVLQJWKH
GHDWKSHQDOW\2WKHUMXURUVZHUHOLNHZLVHH[FXVHGIRUFDXVH                $VWKHGLVWULFWFRXUWUHFRJQL]HGKRZHYHUSHWLWLRQHUjVFODLP
DIWHUWKH\H[SUHVVHGUHVHUYDWLRQVDERXWWKHGHDWKSHQDOW\                UHJDUGLQJLQHIIHFWLYHDVVLVWDQFHRIWULDOFRXQVHOLVLQH[WULFDEO\
  7KH6XSUHPH&RXUWKDVSURYLGHGWKHIROORZLQJJXLGDQFHRQ                FRQQHFWHGWRKLVFODLPRILQHIIHFWLYHDVVLVWDQFHRIDSSHOODWH
WKLVSRLQW                                                               FRXQVHO D FODLP WKDW ZDV QRW SURFHGXUDOO\ GHIDXOWHG  ,Q
                                                                          0DSHVVXSUDWKLVFRXUWIDFHGDVLPLODUFODLPRILQHIIHFWLYH
     :HWDNHWKLVRSSRUWXQLW\WRFODULI\RXUGHFLVLRQLQ            DVVLVWDQFH RI ERWK WULDO DQG DSSHOODWH FRXQVHO LQ DQ 2KLR
  :LWKHUVSRRQ DQG WR UHDIILUP WKH    VWDQGDUG IURP           FDSLWDOFDVH7KHUHWRRZHKHOGWKDWDQ\FODLPRILQHIIHFWLYH
  $GDPV>Y7H[DV@DVWKHSURSHUVWDQGDUGIRUGHWHUPLQLQJ                 DVVLVWDQFHRIWULDOFRXQVHOKDGEHHQSURFHGXUDOO\GHIDXOWHG
  ZKHQ D SURVSHFWLYH MXURU PD\ EH H[FOXGHG IRU FDXVH              'HVSLWHWKLVGHIDXOWZHREVHUYHGWKDWDQH[DPLQDWLRQRIWULDO
  EHFDXVHRIKLVRUKHUYLHZVRQFDSLWDOSXQLVKPHQW7KDW                FRXQVHOjV SHUIRUPDQFH ZDV UHTXLUHG LQ RUGHU WR GHWHUPLQH
  VWDQGDUGLVZKHWKHUWKHMXURUjVYLHZVZRXOGmSUHYHQWRU                 ZKHWKHU DSSHOODWH FRXQVHO KDG EHHQ FRQVWLWXWLRQDOO\
  VXEVWDQWLDOO\LPSDLUWKHSHUIRUPDQFHRIKLVGXWLHVDVD                 LQHIIHFWLYH0DSHV)GDW
  MXURULQDFFRUGDQFHZLWKKLVLQVWUXFWLRQVDQGKLVRDWKl                   )RU WKDW OLPLWHG UHDVRQ ZH QRZ WXUQ WR SHWLWLRQHUjV
  :H QRWH WKDW LQ DGGLWLRQ WR GLVSHQVLQJ ZLWK                     DOOHJDWLRQV WKDW KLV WULDO FRXQVHO UHQGHUHG FRQVWLWXWLRQDOO\
  :LWKHUVSRRQjVUHIHUHQFHWRmDXWRPDWLFlGHFLVLRQPDNLQJ                  LQHIIHFWLYHDVVLVWDQFH,IWULDOFRXQVHOSHUIRUPHGDGHTXDWHO\
  WKLVVWDQGDUGOLNHZLVHGRHVQRWUHTXLUHWKDWDMXURUjVELDV             RXU LQTXLU\ LV DW DQ HQG E\ GHILQLWLRQ DSSHOODWH FRXQVHO
  EHSURYHGZLWKmXQPLVWDNDEOHFODULW\l7KLVLVEHFDXVH
       *UHHUY0LWFKHOO                                1R        1R                                *UHHUY0LWFKHOO       

FDQQRWEHLQHIIHFWLYHIRUDIDLOXUHWRUDLVHDQLVVXHWKDWODFNV             'HIHQVHFRXQVHODVNHGIRUWKHFRXUWWRUHVHUYHUXOLQJXQWLOWKH
PHULW                                                                      MXURUFRXOGDVFHUWDLQZKHWKHUVRPHRQHFRXOGUHSODFHKHU7KH
                                                                             FRXUWGHFOLQHGKRZHYHUDQGH[FXVHGWKHMXURUIRUFDXVH
   *LYHQWKHH[LJHQFLHVDQGFRPSOH[LW\RIFDSLWDOFDVHVLWLV
OLNHO\ WKDW HYHQ H[SHULHQFHG WULDO FRXQVHO ZLOO FRPPLW                   7KHVHFRQGMXURU%HYHUO\3HRSOHVSUHVHQWHGDQRWHIURP
RYHUVLJKWV2IFRXUVHHUURUVRIWDFWLFVRURPLVVLRQGRQRW                 D GRFWRU VWDWLQJ m6KH  LV VXIIHULQJ ZLWK K\SHUWHQVLRQ DQG
QHFHVVDULO\ PHDQ WKDW FRXQVHO KDV IXQFWLRQHG LQ D                     VKRXOGQRWEHDVNHGWRVHUYHDVDVSHFLDOMXURUDWWKLVWLPH
FRQVWLWXWLRQDOO\GHILFLHQWPDQQHUm>,@WLVDOOWRRHDV\IRUD              EHFDXVHRIKHUSK\VLFDOFRQGLWLRQl0UV3HRSOHjVZRUNHG
FRXUW H[DPLQLQJ FRXQVHOjV GHIHQVH DIWHU LW KDV SURYHG                IRUWKHGRFWRUZKRSURYLGHGWKHOHWWHU7KHWULDOFRXUWQRWHG
XQVXFFHVVIXOWRFRQFOXGHWKDWDSDUWLFXODUDFWRURPLVVLRQRI               RQ WKH UHFRUG WKDW WKH GRFWRU FDOOHG WKH FRXUW DQG mZDV
FRXQVHO ZDV XQUHDVRQDEOHl  6WULFNODQG  86 DW              FRQFHUQHG WKDW WKH RIILFH LV QRW UXQQLQJ DV VPRRWKO\ DV KH
,QVWHDGWKLV&RXUWPXVWGHWHUPLQHZKHWKHUFRXQVHOPDGHD                    ZRXOGSUHIHULWLQ0V3HRSOHjVDEVHQFHl
mUHDVRQDEOH GHFLVLRQ WKDW PDNHV SDUWLFXODU LQYHVWLJDWLRQ
XQQHFHVVDU\l,GDW                                                    'HIHQVHFRXQVHOTXHVWLRQHG0UV3HRSOHVZKRFRQFHGHG
                                                                             WKDWVKHZDVXQGHUDORWRIVWUHVVDWZRUN6KHDOVRDGPLWWHG
   3HWLWLRQHUDOOHJHVWKDWWULDOFRXQVHOFRPPLWWHGVHULRXVHUURUV            WKDWVKHZRXOGSUHIHUQRWWRVHUYHIRUERWKKHDOWKDQGUHOLJLRXV
GXULQJ WKH JXLOW SKDVH RI KLV WULDO  7KHVH DOOHJHG HUURUV         UHDVRQV m, MXVW GRQjW IHHO WKDW , VKRXOG EH LQ MXGJPHQW RI
LQFOXGH IDLOXUH WR  FRQWDFW SURVSHFWLYH SURVHFXWLRQ                  VRPHRQHHOVHUHJDUGOHVVRIWKHFULPHl
ZLWQHVVHVLQYHVWLJDWHDOOHJDWLRQVWKDWWKHYLFWLPZDVDIUDLG
RIDPDQQDPHGm5LFNlREWDLQDQH[SHUWWRFKDOOHQJHWKH                    7KHSURVHFXWRUQRWHGWKDWWKHFRXUWKDGDOUHDG\H[FXVHG
FRQFOXVLRQVRIWKHFRURQHUGHWHUPLQHZKHWKHUSHWLWLRQHUjV                WZRRWKHUMXURUVIRUK\SHUWHQVLRQ2YHUGHIHQVHFRXQVHOjV
DOLEL o WKDW KH ZDV ZDWFKLQJ WKH PRYLH m&KLOGUHQ RI WKH           REMHFWLRQWKHFRXUWH[FXVHGWKHMXURUIRUPHGLFDOUHDVRQV
&RUQl RQ WHOHYLVLRQ o ZDV FUHGLEOH  FRPPXQLFDWH
DGHTXDWHO\ZLWKSHWLWLRQHUREMHFWWRWKHFRQGXFWRIYRLU                   ,QSHWLWLRQHUjVYLHZm*LYHQWKHWUHDWPHQWRIZKLWHMXURUV
GLUH  REMHFW WR SURVHFXWRULDO PLVFRQGXFW  UHTXHVW DQ           WKHRQO\ORJLFDOH[SODQDWLRQIRUWKHH[FXVDORI0UV5H\QROGV
LQVWUXFWLRQIRUWKHOHVVHULQFOXGHGRIIHQVHRIWKHIWREMHFW              DQG0UV3HRSOHVLVWKHLUUDFHRUJHQGHUl
WRYDULRXVMXU\LQVWUXFWLRQVDQGREMHFWWRWKHLQWURGXFWLRQ
RIJUXHVRPHSKRWRJUDSKV                                                       7KHGLVWULFWFRXUWQRWHGWKDWWKLVLVVXHZDVQRWUDLVHGRQ
                                                                             GLUHFWDSSHDOHYHQWKRXJKLWZDVEDVHGRQWKHUHFRUGDQGZDV
                                                                             WKHUHIRUHSURFHGXUDOO\GHIDXOWHGSXUVXDQWWRWKH3HUU\UXOH
     
                                                                             :HDJUHHZLWKWKDWDVVHVVPHQW0RUHRYHUWKHWULDOFRXUWKDG
     $OWKRXJK FXUUHQW FRXQVHO IRU SHWLWLRQHU SRLQWV WR D QXPEHU RI HUURUV    DPSOHUDFHQHXWUDOUHDVRQVWRH[FXVHERWKMXURUVIRUFDXVH
DOOHJHGO\ FRPPLWWHG E\ VWDWH DSSHOODWH FRXQVHO KLV EULHI SURSHUO\ IRFXVHV
XSRQ WKH IDLOXUH WR UDLVH LQHIIHFWLYH DVVLVWDQFH RI WULDO FRXQVHO 7KLV
                                                                                  MXURUH[FXVHGEHIRUHTXHVWLRQLQJ
SRVLWLRQ LV XQGHUVWDQGDEOH JLYHQ WKH UHFRUG LQ WKLV FDVH DQG DOVR LQ OLJKW
RI WKLV FRXUWjV PDQ\ UHFHQW GHFLVLRQV YDFDWLQJ GHDWK VHQWHQFHV GXH WR
                                                    )G  WK &LU
LQHIIHFWLYH DVVLVWDQFH 6HH HJ 6NDJJV Y 3DUNHU
                                                                               3HWLWLRQHU REMHFWV WR WKH IDFW WKDW WKH MXU\ FRPPLVVLRQHU
 $EGXUj5DKPDQ Y %HOO  )G   WK &LU                H[FXVHGDSRWHQWLDOMXURUEHIRUHWKHFRXUWRUFRXQVHOKDGDQ
GLVVHQW &DUWHU Y %HOO  )G  WK &LU  %\UG Y &ROOLQV    RSSRUWXQLW\ WR TXHVWLRQ KLP EDVHG XSRQ D OHWWHU IURP DQ
 )G   WK &LU  GLVVHQW FHUW GHQLHG  6&W      HPSOR\HU  (YHQ WKRXJK WKLV SURVSHFWLYH MXURUjV UDFH LV
 0DSHV VXSUD 5LFNPDQ Y %HOO  )G  WK &LU         XQNQRZQSHWLWLRQHUFRQWHQGVWKDWmWKHWULDOFRXUWjVIDLOXUHWR
*URVHFORVH Y %HOO  )G  WK &LU  $XVWLQ Y %HOO 
)G  WK &LU  *OHQQ Y 7DWH  )G  WK &LU 
     *UHHUY0LWFKHOO                               1R       1R                                *UHHUY0LWFKHOO      

SHWLWLRQHUZDVDOORZHGWRLQWURGXFHSHUVRQDOFKDUDFWHULVWLFVLQ            7KHVH DUJXPHQWV QHHG QRW GHWDLQ XV ORQJ EHFDXVH HYHQ
PLWLJDWLRQ GRHV QRW PHDQ WKDW WKH SURVHFXWLRQ PD\ QRW            DVVXPLQJ WKDW WULDO FRXQVHO ZDV QRW UHDVRQDEO\ HIIHFWLYH
mVWURQJO\DQGIRUFHIXOO\DUJXHWKDWVXFKPHUF\QHHGQRWEH               SHWLWLRQHU FDQQRW HVWDEOLVK SUHMXGLFH  7KHUH LV DOPRVW QR
H[WHQGHG DQG WKDW WKH MXU\ VKRXOG QRW EH URXVHG WR D          FKDQFH WKDW WKH YHUGLFW ZRXOG KDYH EHHQ GLIIHUHQW EXW IRU
V\PSDWKHWLFUHDFWLRQl,G                                              FRXQVHOjVDOOHJHGO\GHIHFWLYHSHUIRUPDQFHVLQFHHYLGHQFHRI
                                                                         JXLOW ZDV RYHUZKHOPLQJ  ,Q OLJKW RI WKH IDFWV LQWURGXFHG
   ,QRXUYLHZWKH2KLR6XSUHPH&RXUWFRUUHFWO\UHVROYHGWKLV           GXULQJ WULDO ZH FRQFOXGH WKDW WKHUH LV QR UHDVRQDEOH
LVVXH:HDIILUPWKHGHQLDORIUHOLHI                                  SUREDELOLW\ WKDW GLIIHUHQW DFWLRQV RU D GLIIHUHQW VWUDWHJ\ E\
                                                                         FRXQVHOFRXOGKDYHDOWHUHGWKHYHUGLFW
  GLPSURSHUFKDUDFWHUL]DWLRQRIPLWLJDWLQJIDFWRUV
                                                                            7KDWVDLGFRXQVHOjVSHUIRUPDQFHGXULQJWKHSHQDOW\SKDVH
  'XULQJWULDOGHIHQVHFRXQVHOLQWURGXFHGHYLGHQFHRIWKUHH             SUHVHQWVDPXFKFORVHUTXHVWLRQWKDWZLOOUHTXLUHUHPDQGWR
PLWLJDWLQJ IDFWRUV OLVWHG LQ 2KLR 5HY &RGH  %        WKHGLVWULFWFRXUWIRUIXUWKHUSURFHHGLQJV)LUVWLWDSSHDUVWKDW
+RZHYHU WKH SURVHFXWLRQ GLVFXVVHG DOO VHYHQ PLWLJDWLQJ            WULDOFRXQVHOGLGQRWEHJLQSUHSDULQJIRUWKHPLWLJDWLRQSKDVH
IDFWRUVLQFOXGHGLQWKHVWDWXWH$FFRUGLQJWRSHWLWLRQHUWKH           RI WKH WULDO XQWLO DIWHU FRQYLFWLRQ DV UHIOHFWHG LQ DWWRUQH\
MXU\TXLWHSRVVLEO\LQWHUSUHWHGWKHODFNRIDPLWLJDWLQJIDFWRU          ELOOLQJQRWDWLRQV8QGHUFLUFXPVWDQFHVZKHUHD ILQGLQJRI
WR EH DJJUDYDWLQJ RU DW OHDVW WR KDYH GLPLQLVKHG WKH           JXLOW\FDQQRWFRPHDVDVXUSULVHIDLOXUHWRDQWLFLSDWHVXFKD
PLWLJDWLQJ IDFWRUV WKDW GLG H[LVW  1R FDVH ODZ LV FLWHG LQ   ILQGLQJVRDVWRDGHTXDWHO\SUHSDUHIRUWKHVHQWHQFLQJSKDVH
VXSSRUWRWKHUWKDQIRUWKHJHQHUDOSURSRVLWLRQWKDWFRXUWVPXVW          LVFRQVWLWXWLRQDOO\LPSHUPLVVLEOH6HH*OHQQY7DWH)G
PLQLPL]HWKHULVNWKDWGHDWKZLOOEHLPSRVHGLQDQDUELWUDU\             WK&LU,Q*OHQQDQRWKHU2KLRFDSLWDOFDVH
DQGFDSULFLRXVPDQQHU                                                   WKLVFRXUWYDFDWHGWKHGHDWKVHQWHQFHEDVHGXSRQLQHIIHFWLYH
                                                                         DVVLVWDQFHRIFRXQVHOGXULQJWKHSHQDOW\SKDVH
  7KLVFRQWHQWLRQLVZLWKRXWPHULW
                                                                              $OWKRXJK ERWK RI *OHQQjV FRXUWDSSRLQWHG ODZ\HUV
(sXU\6HOHFWLRQ                                                        ZHUH H[SHULHQFHG FULPLQDO GHIHQVH DWWRUQH\V DQG
                                                                           DOWKRXJK WKH\ KDG VRPH HLJKW PRQWKV WR JHW UHDG\ IRU
  3HWLWLRQHUFRQWHQGVWKHWULDOFRXUWPDGHQXPHURXVHUURUVLQ              VHQWHQFLQJ SURFHHGLQJV QHFHVVLWDWHG E\ D YHUGLFW WKDW
FRQGXFWLQJYRLUGLUH                                                      FRXOGKDUGO\KDYHFRPHDVDVXUSULVHWRWKHPHYLGHQFH
      H[FXVLQJWZREODFNMXURUVIRUFDXVH                                SUHVHQWHG WR WKH VWDWH WULDO FRXUW DW D SRVWVHQWHQFH
                                                                           KHDULQJ VKRZHG WKDW WKH ODZ\HUV PDGH YLUWXDOO\ QR
  +HILUVWDUJXHVWKDWWKHFRXUWLPSURSHUO\H[FXVHGWZREODFN             DWWHPSWWRSUHSDUHIRUWKHVHQWHQFLQJSKDVHRIWKHWULDO
IHPDOHSURVSHFWLYHMXURUVIRUFDXVH                                       XQWLODIWHUWKHMXU\UHWXUQHGLWVYHUGLFWRIJXLOW\,WZDV
                                                                           REYLRXVRUVKRXOGKDYHEHHQWKDWWKHVHQWHQFLQJSKDVH
  7KH ILUVW MXURU 6DUDK 5H\QROGV ZDV H[FXVHG DIWHU VKH           ZDV OLNHO\ WR EH mWKH VWDJH RI WKH SURFHHGLQJV ZKHUH
SUHVHQWHGDOHWWHUIURPWKHH[HFXWLYHGLUHFWRURIWKH<:&$                 FRXQVHOFDQGRKLVRUKHUFOLHQWWKHPRVWJRRGl.XEDW
WR WKH FRXUW VWDWLQJ m6DUDK 5H\QROGV LV DVVXPLQJ D QHZ           Y7KLHUHW)GWK&LUFHUWGHQLHG
DVVLJQPHQWZLWKWKH&HQWUDO<:&$DVRIsXQH7KH                 866&W/(GG\HW
DVVLJQPHQW LV H[WUHPHO\ HVVHQWLDO WR WKH <:&$jV                      *OHQQjV FRXQVHO IDLOHG WR PDNH DQ\ VLJQLILFDQW
DSSURDFKLQJGRZQWRZQUHORFDWLRQl7KHFRXUWILUVWPDGHVXUH               SUHSDUDWLRQV IRU WKH VHQWHQFLQJ SKDVH XQWLO DIWHU WKH
WKDW WKHUH ZDV QR RQH HOVH WR KDQGOH KHU UHVSRQVLELOLWLHV        FRQFOXVLRQ RI WKH JXLOW SKDVH  7KLV LQDFWLRQ ZDV
    *UHHUY0LWFKHOO                               1R      1R                               *UHHUY0LWFKHOO      

  REMHFWLYHO\ XQUHDVRQDEOH  m7R VDYH WKH GLIILFXOW DQG         0DSHV  )G  DW  DOEHLW LQ WKH FRQWH[W RI D
  WLPHFRQVXPLQJWDVNRIDVVHPEOLQJPLWLJDWLRQZLWQHVVHV               FKDOOHQJHGMXU\LQVWUXFWLRQ
  XQWLO DIWHU WKH MXU\jV YHUGLFW LQ WKH JXLOW SKDVH DOPRVW
  LQVXUHVWKDWZLWQHVVHVZLOOQRWEHDYDLODEOHl%ODQFRY              7KHGLVWULFWFRXUWLVDIILUPHG
  6LQJOHWDU\)GWK&LUFHUW
  GHQLHG866&W/(GG                  FV\PSDWK\
  
                                                                         7KHSURVHFXWRUDOVRDVNHGWKHMXU\WRVHWDVLGHV\PSDWK\LQ
                                                                UHDFKLQJDGHFLVLRQ

     7KHUHDVRQIRUWKHSDXFLW\RIPLWLJDWLRQHYLGHQFHDV                 :KDW\RXKDYHWREHFDUHIXORIODGLHVDQGJHQWOHPHQ
  ZH KDYH VDLG ZDV ODFN RI SUHSDUDWLRQ RQ WKH SDUW RI         DQGsXGJH6SLFHUZLOOLQVWUXFW\RXRQWKLVWKDW\RXGRQRW
  *OHQQjVODZ\HUV7KHODZ\HUVPDGHQRV\VWHPDWLFHIIRUW                 GHFLGHWKLVFDVHEDVHGRQELDVV\PSDWK\RUSUHMXGLFH
  WRDFTXDLQWWKHPVHOYHVZLWKWKHLUFOLHQWjVVRFLDOKLVWRU\
  7KH\QHYHUVSRNHWRDQ\RIKLVQXPHURXVEURWKHUVDQG                     ,QRWKHUZRUGVLI\RXJRLQWRWKHMXU\URRPDQG\RX
  VLVWHUV7KH\QHYHUH[DPLQHGKLVVFKRROUHFRUGV7KH\                IHHO VRUU\ IRU 3DXO *UHHU EHFDXVH KH KDV DQ DOFRKRO
  QHYHU H[DPLQHG KLV PHGLFDO UHFRUGV LQFOXGLQJ DQ                 SUREOHP\RXIHHOVRUU\IRU3DXO*UHHUEHFDXVHKHKDV
  HPHUJHQF\URRPUHFRUGSUHSDUHGDIWHUKHFROODSVHGLQ                   ERUGHUOLQHLQWHOOLJHQFHRU\RXIHHOVRUU\IRU3DXO*UHHU
  FRXUW RQH GD\ RU UHFRUGV RI PHQWDO KHDOWK FRXQVHOLQJ          EHFDXVHKHKDGVRPDQ\FKLOGUHQLQKLVIDPLO\RUWKDWKH
  WKH\ NQHZ KH KDG UHFHLYHG  7KH\ QHYHU WDONHG WR KLV         RQO\ZHQWWRDFHUWDLQOHYHORIHGXFDWLRQLI\RXIHHOVRUU\
  SUREDWLRQ RIILFHU RU H[DPLQHG WKH SUREDWLRQ RIILFHUjV            IRUKLPWKDWLVQjWPLWLJDWLRQ
  UHFRUGV  $QG DOWKRXJK WKH\ DUUDQJHG IRU WHVWV VRPH
  PRQWKVEHIRUHWKHVWDUWRIWKHWULDOWRGHWHUPLQHZKHWKHU           2IFRXUVHLWLVD[LRPDWLFWKDWDMXU\FDQQRWEHSUHFOXGHGIURP
  KHZDVFRPSHWHQWWRVWDQGWULDOWKH\ZDLWHGXQWLODIWHUKH          FRQVLGHULQJYLUWXDOO\DQ\DVSHFWRIGHIHQGDQWjVFKDUDFWHULQ
  KDGEHHQIRXQGJXLOW\EHIRUHWDNLQJWKHLUILUVWVWHSRU           PLWLJDWLRQ  6HH (GGLQJV Y 2NODKRPD  86  
  PLVVWHSDVZHVKDOOH[SODLQSUHVHQWO\WRZDUGDUUDQJLQJ           WKHVHQWHQFHULQFDSLWDOFDVHVPXVWEHSHUPLWWHGWR
  IRU H[SHUW ZLWQHVVHV ZKR PLJKW KDYH SUHVHQWHG                  FRQVLGHU DQ\ UHOHYDQW PLWLJDWLQJ IDFWRU FLWLQJ /RFNHWW Y
  PLWLJDWLQJ HYLGHQFH RQ sRKQ *OHQQjV LPSDLUHG EUDLQ             2KLR86
  IXQFWLRQ                                                              2QFHDJDLQRXUUHFHQWGHFLVLRQLQ0DSHVFRPHVFORVHWR
,GDW$VDOUHDG\QRWHG WKLV FRXUWKDVYDFDWHGD          SUHVHQWLQJWKLVLVVXH,QWKDWFDVHGHIHQGDQWKDGDVNHGIRUD
QXPEHU RI GHDWK VHQWHQFHV LQ UHFHQW \HDUV EDVHG XSRQ           mPHUFLIXOGLVFUHWLRQlLQVWUXFWLRQ:HQRWHGKRZHYHUWKDW
LQDGHTXDWHSHQDOW\SKDVHSUHSDUDWLRQE\WULDOFRXQVHO6HH           WKH6XSUHPH&RXUWKDGXSKHOGDQLQVWUXFWLRQWRWKHHIIHFWWKDW
HJ &DUWHU Y %HOO  )G   WK &LU    WKHMXU\VKRXOGQRWEHVZD\HGE\mPHUHVHQWLPHQWFRQMHFWXUH
m:KLOH ZH XQGHUVWDQG WKH JUHDW EXUGHQV RQ DSSRLQWHG            V\PSDWK\ SDVVLRQ SUHMXGLFH SXEOLF RSLQLRQ RU SXEOLF
FRXQVHOLQFDSLWDOFDVHVDQGWKHRIWHQOLPLWHGILQDQFLDOVXSSRUW       IHHOLQJl  0DSHV  )G  DW   FLWLQJ &DOLIRUQLD Y
WKH\UHFHLYHIRULQYHVWLJDWLRQDQGGLVFRYHU\MXVWLFHUHTXLUHV         %URZQ86/(GG
WKDWFRXQVHOPXVWGRPRUHWKDQDSSHDULQFRXUWRUDUJXHWRWKH           7KH 2KLR 6XSUHPH &RXUW UHMHFWHG SHWLWLRQHUjV FODLP
MXU\l *URVVFORVH Y %HOO  )G   WK &LU    EHFDXVHmV\PSDWK\DORQHLVQRWDPLWLJDWLQJIDFWRUl*UHHU
 IDLOXUH WR SUHSDUH DGHTXDWHO\ IRU PLWLJDWLRQ  IRXU     2KLR 6W G DW   1(G DW   sXVW EHFDXVH
     *UHHUY0LWFKHOO                            1R       1R                                *UHHUY0LWFKHOO      

    $V>WKHRWKHUSURVHFXWRU@WROG\RXZHGRQRWVHHNWKH            ZLWQHVVHV$XVWLQY%HOO)GWK&LU
  GHDWKSHQDOW\OLJKWO\:HGRQjWIULYRORXVO\FRPHLQWRD            YDFDWLQJ VHQWHQFH EHFDXVH GHIHQVH FRXQVHO GLG QRW
  FRXUWURRPDVNLQJIRUWKDWSHQDOW\                                  UHDVRQDEO\ LQYHVWLJDWH WKH IDFWV RI WKH FDVH RU UHDVRQDEO\
                                                                      GHWHUPLQH WKDW DQ LQYHVWLJDWLRQ ZDV QRW QHFHVVDU\
7KH2KLR6XSUHPH&RXUWFRQVLGHUHGSHWLWLRQHUjVDUJXPHQWV              )XUWKHUPRUH ODVW WHUP WKH 6XSUHPH &RXUW IRXQG FRXQVHO
DQG FRQFOXGHG m>:@KDWHYHU UHVLGXDO HUURU LQKHUHV LQ WKH       FRQVWLWXWLRQDOO\LQHIIHFWLYHIRUIDLOLQJWRORRNLQWRGHIHQGDQWjV
PDNLQJRIWKHVWDWHPHQWVDWLVVXHLWZRXOGDSSHDUWKDWVXFK          mQLJKWPDULVKFKLOGKRRGlDQGPHQWDOOLPLWDWLRQVLQSUHSDUDWLRQ
HUURU ZDV KDUPOHVVl  *UHHU  2KLR 6W G DW      IRUPLWLJDWLRQ:LOOLDPV86DW
1(GDW7KHGLVWULFWFRXUWOLNHZLVHFRQFOXGHGm*LYHQ
WKH ODUJHO\ XQGLVSXWHG HYLGHQFH VXSSRUWLQJ *UHHUjV                 $WWDFKHGWRWKHSHWLWLRQIRUSRVWFRQYLFWLRQUHOLHIZDVDQ
FRQYLFWLRQWKLV&RXUWFDQQRWILQGWKDWWKHFXPXODWLYHHIIHFW         DIILGDYLW E\ sDPHV (LVHQEHUJ D SV\FKRORJLVW ZKR KDV
RIWKHWZRLVVXHVVRLQIHFWHG*UHHUjVWULDOZLWKXQIDLUQHVVDV        FRQVXOWHGLQQXPHURXVFULPLQDOFDVHVLQFOXGLQJVRPHIRUW\
WRUHVXOWLQDGHQLDORIKLVGXHSURFHVVULJKWVl0HPRUDQGXP         FDSLWDO FDVHV  +H UHYLHZHG SHWLWLRQHUjV ILOH DQG LGHQWLILHG
RI2SLQLRQ$XJDWs$DW                        VHYHUDODUHDVRILQDGHTXDWHSUHSDUDWLRQIDLOXUHWRLQWHUYLHZ
                                                                      IDPLO\PHPEHUVIDLOXUHWRUHYLHZVFKRROUHFRUGVWKDWZRXOG
  :HDIILUPWKHGLVWULFWFRXUW                                       UHIOHFW SHWLWLRQHUjV LQWHOOHFWXDO GHYHORSPHQW DQG IDLOXUH WR
                                                                      FDOODQ\PHQWDOKHDOWKH[SHUWV
  E    FRPPHQW WKDW MXU\jV GHFLVLRQ RQ GHDWK RQO\ D
        UHFRPPHQGDWLRQ                                                  )XUWKHUPRUHLQKLVGHSRVLWLRQWULDOFRXQVHO5REHUW%DNHU
                                                                      FRQFHGHGWKDWSUHSDUDWLRQIRUWKHPLWLJDWLRQSKDVHEHJDQDIWHU
   'XULQJ FORVLQJ DUJXPHQWV WKH SURVHFXWRU VWDWHG m<RXU       WKH MXU\ UHWXUQHG D YHUGLFW  :LWK UHJDUG WR FRQWDFWLQJ
UHVXOW WKHQ LI \RX VKRXOG ILQG WKDW WKH DJJUDYDWLQJ          UHODWLYHVKHUHFDOOHG
FLUFXPVWDQFHV RXWZHLJK WKH PLWLJDWLQJ IDFWRUV LV WR
UHFRPPHQGWRsXGJH6SLFHUWKDWWKHGHDWKSHQDOW\EHLPSRVHG             /HWPHSXWLWWR\RXWKLVZD\,IVRPHRQHZRXOGKDYH
LQ WKLV FDVHl  3HWLWLRQHU FRQWHQGV WKDW WKLV FRPPHQW UXQV     FDOOHG,ZRXOGKDYHWDONHGWRWKHP$QGLIWKH\ZRXOG
DIRXORI&DOGZHOOY0LVVLVVLSSL86ZKLFK            KDYHKDGVRPHWKLQJIDYRUDEOHWRVD\RUEHHQZLOOLQJWR
VWDQGV IRU WKH SURSRVLWLRQ WKDW WKH 6WDWH FDQQRW VHHN WR       JHWLQYROYHGZHFHUWDLQO\ZRXOGKDYHGRQHLW,jYHKHDUG
PLQLPL]HWKHMXU\jVVHQVHRIUHVSRQVLELOLW\IRUGHWHUPLQLQJWKH         WKDWHYHU\ERG\jVQRZVD\LQJWKH\FDOOHGEXW,MXVWGRQjW
DSSURSULDWHQHVVRIGHDWK,GDW                                   WKLQNWKDWjVWKHFDVH
  &DOGZHOO LV GLVWLQJXLVKDEOH IURP WKH LQVWDQW FDVH  ,Q      $VIRUGHIHQVHFRXQVHOjVWKHRU\RIPLWLJDWLRQLWZDVmWRWU\
&DOGZHOO WKH MXU\ ZDV WROG m<RXU MRE >LH GHFLVLRQ RQ    DQG VDYH 3DXOjV OLIH     +H KDG D WRXJK OLIH DQG ZDV
GHDWK@ LV UHYLHZDEOH    WKH GHFLVLRQ \RX UHQGHU LV       GLVDGYDQWDJHGl  1RQHWKHOHVV GHIHQVH FRXQVHO GLG QRW
DXWRPDWLFDOO\UHYLHZDEOHE\WKH6XSUHPH&RXUWl,GDW          FRQVLGHUUHTXHVWLQJDSSRLQWPHQWRIDSV\FKRORJLVWEXWLQVWHDG
+RZHYHULQWKHFDVHEHIRUHXVWKHSURVHFXWRUjVFRPPHQW         UHOLHG XSRQ WKH GRFWRU ZKR ZDV KHOSLQJ WR SUHSDUH WKH
UHSUHVHQWVDFRUUHFWVWDWHPHQWRI2KLRODZ6HH2KLR5HY            SUREDWLRQUHSRUW$VKLVWHVWLPRQ\UHYHDOV%DNHUKDGOLWWOH
&RGH'2QGLUHFWDSSHDOWKH2KLR6XSUHPH             JUDVSRIWKHGHWDLOVRISHWLWLRQHUjVOLIH,QVWHDGKHUHOLHGXSRQ
&RXUW KHOG WKDW WKLV GLVWLQFWLRQ FRUUHFWO\ GLVSRVHG RI WKH    WKHSUHVHQWHQFHLQYHVWLJDWLRQZKLFKKHKRSHGmZRXOGEH
&DOGZHOOFODLP*UHHU2KLR6WGDW1(GDW          KHOSIXO LQ VHQWHQFLQJ  0RVW RI LW WXUQHG RXW WR EH
0RUHRYHUWKLVFRXUWUHFHQWO\UHMHFWHGDVLPLODUFODLPLQ       GHWULPHQWDOl  0RUHRYHU WKLV UHOLDQFH RQ WKH VWDWHjV
                                                                      SV\FKRORJLVW ZDV PLVSODFHG  $V 'U .DWKOHHQ 3 6WDIIRUG
    *UHHUY0LWFKHOO                              1R       1R                                *UHHUY0LWFKHOO       

WHVWLILHGm,OHWWKHsXGJHNQRZWKDW,ZRXOGKDYHWRWDNHD                $QG,JXDUDQWHH\RXODGLHVDQGJHQWOHPHQLIWKDWZDV
YHU\ OLPLWHG UROH DQG EH DEOH WR DGGUHVV RQO\ WKH RQH          LQFRUUHFWLIWKDWZDVDGLVSXWDEOHRSLQLRQWKHVHGHIHQVH
PLWLJDWLQJIDFWRUZKLFKZDVVLPLODUWRWKHVDQLW\VWDQGDUG             DWWRUQH\VZRXOGKDYHKDGDQRWKHUH[SHUWRUWZRRUWKUHH
DQGWKDWWKDWZRXOGKDYHWREHWKHUROHWKDW,ZRXOGWDNHLQWKH         RUIRXUWHVWLI\LQWKLVFDVHDQGWHOO\RXWKDWDQGWKHUHLV
PDWWHUl  6KH ZHQW RQ WR WHVWLI\ WKDW GHIHQVH FRXQVHO ZDV      QRWRQHWKDWFDPHIRUZDUG
DZDUHRIKHUOLPLWHGUROH
                                                                       $FFRUGLQJ WR SHWLWLRQHU WKLV FRPPHQWDU\ XQODZIXOO\
  'XULQJ KLV GHSRVLWLRQ %DNHU DOVR VWDWHG m:H KDG EHHQ       DWWHPSWHGWRVKLIWWKHEXUGHQRISURRIWRKLP
DIWHU3DXOIRUVRPHWLPHWRSURYLGHXVZLWKIDPLO\UHODWLYHV
SHRSOHWKDWZRXOGEHRIVRPHEHQHILWWRKLPDQGKHQHYHU                  7KLVFLUFXLWKDVH[SOLFLWO\KHOGWKDWm,IDGHIHQGDQWWHVWLILHV
JDYHXVDQ\LQIRUPDWLRQDERXWSHRSOHl+RZHYHUKHZHQWRQ            DSURVHFXWRUPD\DWWDFNKLVFUHGLELOLW\WRWKHVDPHH[WHQW
WRLQGLFDWHWKDWKHNQHZVHYHUDOWKLQJVWKDWPHULWHGIXUWKHU           DV DQ\ RWKHU ZLWQHVVl 8QLWHG 6WDWHV Y )UDQFLV  )G
LQYHVWLJDWLRQ WKDW DV D \RXQJVWHU SHWLWLRQHU KDG VHHQ KLV     WK &LU  FLWLQJ FDVHV  2I FRXUVH VXFK
IDWKHU PXUGHUHG EHIRUH KLV RZQ H\HV WKDW KH KDG PDQ\         FRPPHQWDU\PXVWEHVXSSRUWHGE\UHDVRQDEOHLQIHUHQFHVIURP
EURWKHUVDQGVLVWHUVWKDWKHKDGEHHQLQFDUFHUDWHGDVD\RXWK        WKH UHFRUG DQG QRW VLPSO\ UHSUHVHQW WKH SURVHFXWRUjV RZQ
WKDWKHKDGEHHQLQIRVWHUFDUHWKDWKHVKRWDFRXVLQDWDJH      RSLQLRQ  ,G  +HUH WKHUH LV QR GLVSXWH WKDW SHWLWLRQHUjV
DQGWKDWKHZDVDOFRKROLF1RQHRIWKHVHOHDGVDSSHDUVWR             WHVWLPRQ\FKDQJHG+HQFHWKHmFKDPHOHRQlFRPPHQWIHOO
KDYHEHHQSXUVXHGZLWKDQ\WKLQJDSSURDFKLQJYLJRU$VWKLV            ZLWKLQWKHERXQGVRISHUPLVVLEOHFRPPHQW
FRXUWKDVREVHUYHG
                                                                          :KLOHWKHSURVHFXWRUjVUHPDUNFRQFHUQLQJSHWLWLRQHUjVODFN
    &HUWDLQO\WULDOFRXQVHOPXVWFRPPLWDVHULRXVHUURUWR            RIDQH[SHUWWRUHIXWHWKHFRURQHUjVWHVWLPRQ\PD\KDYHEHHQ
  EHMXGJHGXQFRQVWLWXWLRQDOO\LQHIIHFWLYH+RZHYHUZKHQ             LOODGYLVHG RQH FDQQRW VD\ WKDW mWKH LPSURSULHW\ ZDV VR
  DFOLHQWIDFHVWKHSURVSHFWRIEHLQJSXWWRGHDWKXQOHVV             IODJUDQW WKDW LW UHTXLUH>V@ UHYHUVDO EHFDXVH RQO\ D QHZ WULDO
  FRXQVHO REWDLQV DQG SUHVHQWV VRPHWKLQJ LQ PLWLJDWLRQ          FRXOGFRUUHFWWKHHUURUl,GDW
  PLQLPDOVWDQGDUGVUHTXLUHVRPHLQYHVWLJDWLRQ
                                                                         LPSURSHUUHPDUNVGXULQJVHQWHQFLQJSKDVH
0DSHV)GDW
                                                                         3HWLWLRQHUREMHFWVWRVHYHUDORIWKHFRPPHQWVPDGHE\WKH
 'HIHQVHFRXQVHOGLGSXWRQDFDVHLQPLWLJDWLRQKRZHYHU             SURVHFXWLRQGXULQJWKHVHQWHQFLQJSKDVH
ZKLFKWKH2KLR6XSUHPH&RXUWVXPPDUL]HGLWWKLVZD\
                                                                         D   FRQVLGHUDWLRQRIWKHKHLQRXVQDWXUHRIWKHFULPHDQG
  )DFWRUVLQWURGXFHGE\DSSHOODQWIRUPLWLJDWLRQSXUSRVHV                     GHFLVLRQWRVHHNGHDWKSHQDOW\
  ZHUH WKDW DSSHOODQW ZDV UDLVHG LQ DQ HQYLURQPHQW RI
  SRYHUW\KLVSDUHQWVGLHGZKHQKHZDVTXLWH\RXQJKLV                 'XULQJ FORVLQJ DUJXPHQWV WKH SURVHFXWRU PDGH WKH
  IDWKHUZDVNLOOHGLQIURQWRIKLPKHKDVDUHODWLYHO\ORZ           IROORZLQJFRPPHQWV
  ,4DQGLVXQHGXFDWHGKHKDVDKLVWRU\RIDOFRKROLVPDQG
  XQHPSOR\PHQW KLV FRQYLFWLRQ ZDV EDVHG RQ                           7KHDJJUDYDWLQJFLUFXPVWDQFHVLQWKLVFDVHDUHKHLQRXV
  FLUFXPVWDQWLDOHYLGHQFHDQGDSSHOODQWWHVWLILHGWKDWKHLV            7KHGHDWKRI/RXLV5RWKWKHUREEHU\WKDWRFFXUUHGDUH
  LQQRFHQW 2EYLRXVO\ VXFK HYLGHQFH LV UHOHYDQW XQGHU             KHLQRXVDJJUDYDWLQJFLUFXPVWDQFHV
  IDFWRU QXPEHU VHYHQ DQG LV DOVR SDUW RI WKH KLVWRU\
  FKDUDFWHUDQGEDFNJURXQGRIWKHRIIHQGHU7KXVQRQHRI
    *UHHUY0LWFKHOO                             1R    1R                             *UHHUY0LWFKHOO     

RQGLUHFWDSSHDODQGWKHGLVWULFWFRXUWFRQFOXGHGDVKDGWKH        WKHILUVWVL[PLWLJDWLQJIDFWRUVKDVDQ\UHOHYDQFH:HILQG
FRXUWVRI2KLRWKDWLWKDGEHHQSURFHGXUDOO\GHIDXOWHG            VXFK HYLGHQFH FRPSOHWHO\ RYHUVKDGRZHG E\ WKH
                                                                     GHPRQVWUDWHGDJJUDYDWLQJFLUFXPVWDQFH0RUHRYHUZH
  :HDIILUPEDVHGXSRQSURFHGXUDOGHIDXOW                           QRWH WKDW QRWKLQJ LQ DSSHOODQWjV KLVWRU\ RU EDFNJURXQG
                                                                     LQGLFDWHVWKDWWKHVHQWHQFHVDUHRWKHUWKDQDSSURSULDWH
  LPSURSHUFORVLQJDUJXPHQWLQJXLOWSKDVH
                                                                   *UHHU  2KLR 6W G DW   1(G DW 
  'XULQJKHUFORVLQJDUJXPHQWLQWKHJXLOWSKDVHRIWKHWULDO     )XUWKHUPRUH 'U 6WDIIRUGjV UHSRUW FRQWDLQV PXFK RI WKH
WKHSURVHFXWRUPDGHVHYHUDOUHPDUNVWKDWSHWLWLRQHUFRQWHQGV       EDFNJURXQGLQIRUPDWLRQWKDWSHWLWLRQHUDOOHJHVVKRXOGKDYH
GHSULYHGKLPRIDIDLUWULDO7KHGLVWULFWFRXUWGHQLHGUHOLHI    EHHQ LQYHVWLJDWHG KHQFH WKH VWDWH DUJXHV WKDW LW ZDV
EHFDXVHSHWLWLRQHUIDLOHGWRUDLVHWKHPRQGLUHFWDSSHDODQG       UHDVRQDEOHIRUGHIHQVHFRXQVHOWRUHO\XSRQLW
WKXVWKH\DUHSURFHGXUDOO\EDUUHG:HDJUHHWKDWWKLVFODLP
KDVEHHQSURFHGXUDOO\GHIDXOWHG                                     $V ZH LQGLFDWHG HDUOLHU SHWLWLRQHU KDV SURFHGXUDOO\
                                                                   GHIDXOWHGKLVLQHIIHFWLYHDVVLVWDQFHRIWULDOFRXQVHOFODLP7KH
  (YHQZHUHZHWRUHDFKWKHPHULWVRIWKHFODLPKRZHYHU          SUHFHGLQJGLVFXVVLRQWKHUHIRUHLVUHOHYDQWmRQO\LQVRIDUDVLW
RXUGHFLVLRQZRXOGQRWEHDOWHUHG$PRQJRWKHUWKLQJVWKH         EHDUV RQ WKH TXHVWLRQ ZKHWKHU DSSHOODWH FRXQVHO ZDV
SURVHFXWRUWROGWKHMXU\                                          XQFRQVWLWXWLRQDOO\LQHIIHFWLYHLQIDLOLQJWRUDLVHLWl0DSHV
                                                                    )G DW   0DSHV SURYLGHV XV ZLWK WKH IROORZLQJ
    'HIHQGDQWYDULHVKLVVWRULHVDQGKLVDELOLW\WRVKDGHWKH      JXLGDQFHFRQFHUQLQJRXUDSSURDFKWRWKLVLVVXH
  HYLGHQFHLI\RXZDQWOLNHDFKDPHOHRQ
                                                                       7KH FDVHV GHFLGHG E\ WKLV FRXUW RQ WKH LVVXH RI
                                                              LQHIIHFWLYH DVVLVWDQFH RI DSSHOODWH FRXQVHO VXJJHVW WKH
                                                                     IROORZLQJ FRQVLGHUDWLRQV WKDW RXJKW WR EH WDNHQ LQWR
    ,ZDVWKLQNLQJODVWQLJKWZKHQ,ZDVZRUNLQJRQP\               DFFRXQW LQ GHWHUPLQLQJ ZKHWKHU DQ DWWRUQH\ RQ GLUHFW
  DUJXPHQWWKDWRIDOOWKHZLWQHVVHVWKDWKDYHWHVWLILHGDQG         DSSHDOSHUIRUPHGUHDVRQDEO\FRPSHWHQWO\
  KRZKHKDGFKDQJHGZKDWKHKDGWROGSUHYLRXVO\WRPHHW
  RUWRPHVKLQZLWKZKDWWKHVHSHRSOHZHUHVD\LQJ               :HUH WKH RPLWWHG LVVXHV mVLJQLILFDQW DQG
                                                                            REYLRXVl"
3HWLWLRQHU FRQWHQGV WKLV DUJXPHQW ZDV LPSURSHU  +H DOVR
ILQGVIDXOWZLWKWKHIROORZLQJFRPPHQWDU\RQWKHFRURQHUjV               :DV WKHUH DUJXDEO\ FRQWUDU\ DXWKRULW\ RQ WKH
WHVWLPRQ\                                                                  RPLWWHGLVVXHV"
     'U&R[WHVWLILHGLQWKLVFDVH+HLVDQH[SHUWZLWQHVV           :HUH WKH RPLWWHG LVVXHV FOHDUO\ VWURQJHU WKDQ
  DQG LQ WKLV FDVH DQ H[FHSWLRQDO H[SHUW ZLWQHVV  +LV             WKRVHSUHVHQWHG"
  WHVWLPRQ\ZDVoDQG\RXVDZKLPKHUHRQWKHZLWQHVV
  VWDQGVD\LWDQGGHPRQVWUDWHLWoWKDWWKHFXWVILUVWRIDOO         :HUHWKHRPLWWHGLVVXHVREMHFWHGWRDWWULDO"
  ZHUHFDXVHGE\DNQLIHQRWE\JODVV
                                                                         :HUHWKHWULDOFRXUWjVUXOLQJVVXEMHFWWRGHIHUHQFH
                                                                     RQDSSHDO"
      *UHHUY0LWFKHOO                              1R      1R                                *UHHUY0LWFKHOO      

        'LG DSSHOODWH FRXQVHO WHVWLI\ LQ D FROODWHUDO          WDQWDPRXQWWRDGXHSURFHVVYLRODWLRQ6HH*DOOY3DUNHU
           SURFHHGLQJ DV WR KLV DSSHDO VWUDWHJ\ DQG LI VR     )GWK&LU
           ZHUHWKHMXVWLILFDWLRQVUHDVRQDEOH"
                                                                           ,QRUGHUWRHVWDEOLVKLPSURSHUXVHRISHUHPSWRU\FKDOOHQJHV
        :KDWZDVDSSHOODWHFRXQVHOjVOHYHORIH[SHULHQFH             D GHIHQGDQW PXVW ILUVW PDNH RXW D SULPD IDFLH FDVH ZKLFK
           DQGH[SHUWLVH"                                              LQYROYHVVKRZLQJWKDWKHLVDPHPEHURIDFRJQL]DEOHUDFLDO
                                                                        JURXSDQGWKDWWKHSURVHFXWRUKDVXVHGSHUHPSWRU\FKDOOHQJHV
        'LGWKHSHWLWLRQHUDQGDSSHOODWHFRXQVHOPHHWDQG            WR UHPRYH PHPEHUV RI GHIHQGDQWjV UDFH IURP WKH YHQLUH
           JRRYHUSRVVLEOHLVVXHV"                                    2QFHWKLVVKRZLQJKDVEHHQPDGHWKHSURVHFXWRUPXVWRIIHU
                                                                        D UDFHQHXWUDO H[SODQDWLRQ IRU FKDOOHQJLQJ WKH MXURUV mWKH
        ,V WKHUH HYLGHQFH WKDW FRXQVHO UHYLHZHG DOO WKH       JRYHUQPHQWjV SURIIHUHG UHDVRQ QHHG QRW EH SDUWLFXODUO\
           IDFWV"                                                      SHUVXDVLYHRUHYHQSODXVLEOHVRORQJDVLWLVQHXWUDOl+DUULV
                                                                        )GDW7KHFRXUWWKHQGHFLGHVZKHWKHUGHIHQGDQW
       :HUH WKH RPLWWHG LVVXHV GHDOW ZLWK LQ RWKHU           KDV SURYHQ WKDW UDFLDO DQLPXV PRWLYDWHG WKH XVH RI WKH
           DVVLJQPHQWVRIHUURU"                                       SHUHPSWRU\FKDOOHQJH,QWKLVFDVHWKHSURVHFXWRUZDVQHYHU
                                                                        DIIRUGHGWKHRSSRUWXQLW\WRSURYLGHDUDFHQHXWUDOH[SODQDWLRQ
       :DVWKHGHFLVLRQWRRPLWDQLVVXHDQXQUHDVRQDEOH            EHFDXVHGHIHQVHFRXQVHOGLGQRWREMHFWWRVSHFLILFVWULNHV
           RQH ZKLFK RQO\ DQ LQFRPSHWHQW DWWRUQH\ ZRXOG
           DGRSW"                                                        :HDIILUPWKHGLVWULFWFRXUWjVFRQFOXVLRQWKDWWKLVLVVXHKDV
                                                                        EHHQSURFHGXUDOO\GHIDXOWHGEHFDXVHLWZDVQRWUDLVHGXSRQ
      0DQLIHVWO\WKLVOLVWLVQRWH[KDXVWLYHDQGQHLWKHUPXVW        GLUHFWDSSHDO:KLOHSHWLWLRQHUVHHNVWRHYDGHWKLVUHVXOWE\
  LW SURGXFH D FRUUHFW mVFRUHl ZH RIIHU WKHVH LQTXLULHV        UDLVLQJ WKH LVVXH LQ WKH FRQWH[W RI LQHIIHFWLYH DVVLVWDQFH RI
  PHUHO\DVPDWWHUVWREHFRQVLGHUHG                                   DSSHOODWHFRXQVHOZHGHFOLQHKLVLQYLWDWLRQ7KHWULDOUHFRUG
0DSHV)GDWFLWDWLRQVRPLWWHG,QRXUYLHZ            ZRXOG QRW FDXVH FRPSHWHQW DSSHOODWH FRXQVHO WR FRQVLGHU
JLYHQ WKH UHFRUG WKH LQHIIHFWLYH DVVLVWDQFH RI WULDO FRXQVHO   UDLVLQJD%DWVRQFKDOOHQJHDQGHYHQLIFRXQVHOKDGWKHEHQHILW
SUHVHQWHGDmVLJQLILFDQWDQGREYLRXVlFODLPWKDWDFRPSHWHQW            RIWKHLQIRUPDWLRQGHYHORSHGGXULQJVXEVHTXHQWSURFHHGLQJV
DWWRUQH\LQDFDSLWDOFDVHZRXOGDOPRVWFHUWDLQO\SUHVHQWRQ            RXU UHYLHZ RI WKRVH PDWHULDOV FRQYLQFHV XV WKDW DSSHOODWH
DSSHDO:KLOHDSSHOODWHDWWRUQH\VVKRXOGDOZD\VDWWHPSWWR             FRXQVHOjV GHFLVLRQ QRW WR UDLVH WKH %DWVRQ LVVXH  IHOO ZHOO
ZLQQRZRXWWKHLUEHVWLVVXHVIRUSUHVHQWDWLRQWRWKHFRXUWVLQ         ZLWKLQ WKH UDQJH RI HIIHFWLYH DVVLVWDQFH DV GHILQHG E\
D FDSLWDO FDVH ZKLFK E\ GHILQLWLRQ LQYROYHV WKH XOWLPDWH       6WULFNODQG
VRFLHWDOVDQFWLRQDSSHOODWHDWWRUQH\VPXVWHUURQWKHVLGHRI               XVH RI SHUHPSWRULHV WR VWULNH MXURUV ZKR H[SUHVVHG
LQFOXVLRQSDUWLFXODUO\ZKHQDVKHUHWKHUHDSSHDUWRH[LVWD                 KHVLWDWLRQDERXWGHDWKSHQDOW\
VLJQLILFDQWQXPEHURIIDFWVWRVXSSRUWWKHFODLP
                                                                          7KHQH[WDOOHJHGLQVWDQFHRImSURVHFXWRULDOPLVFRQGXFWlLV
  ,Q DGGLWLRQ WR WKH UHODWLYH VWUHQJWK RI WKH LQHIIHFWLYH       WKHVWDWHjVGHFLVLRQWRXVHSHUHPSWRU\FKDOOHQJHVWRH[FXVH
DVVLVWDQFH FODLP VHYHUDO RWKHU RI WKH IDFWRUV VXJJHVWHG E\     WZRMXURUVZKRH[SUHVVHGKHVLWDWLRQDERXWLPSRVLQJWKHGHDWK
0DSHVIDYRUSHWLWLRQHUjVSRVLWLRQ)LUVWWKHOHJDOYLDELOLW\RI       SHQDOW\%RWKPHQLQGLFDWHGGXULQJYRLUGLUHWKDWWKH\FRXOG
DQLQHIIHFWLYHDVVLVWDQFHFODLPKDGEHHQILUPO\HVWDEOLVKHGE\          IROORZ WKH FRXUWjV LQVWUXFWLRQV EXW WKDW WKH\ IHOW WKH GHDWK
6WULFNODQG  6HFRQG DW WKH WLPH RI WKH GLUHFW DSSHDO WULDO   SHQDOW\VKRXOGEHXVHGVSDULQJO\7KLVLVVXHZDVQRWUDLVHG
FRXQVHOKDGQRWWHVWLILHGLQDFROODWHUDOSURFHHGLQJFRQFHUQLQJ
       *UHHUY0LWFKHOO                                1R        1R                                 *UHHUY0LWFKHOO       

ULJKW WR FRXQVHO ZKHQ PRXQWLQJ FROODWHUDO DWWDFNV XSRQ                WULDOVWUDWHJ\7KLUGQHLWKHURISHWLWLRQHUjVDSSHOODWHDWWRUQH\V
FRQYLFWLRQVLQVWDWHFRXUW                                                 KDGHYHUSUHSDUHGDGHDWKSHQDOW\DSSHDO$QGIRXUWKWKH
                                                                             RPLWWHG LVVXHV ZHUH QRW GHDOW ZLWK LQ WKH FRQWH[W RI RWKHU
  :H DIILUP WKDW LVVXH EDVHG XSRQ WKH UHDVRQLQJ RI WKH             DVVLJQPHQWVRIHUURU
GLVWULFWFRXUW
                                                                                ,QWKHFDVHEHIRUHXVDSSHOODWHFRXQVHOVjIDLOXUHWRUDLVH
'3URVHFXWRULDO0LVFRQGXFW                                                 LQHIIHFWLYHDVVLVWDQFHRQGLUHFWDSSHDOLVIXUWKHUFRPSOLFDWHG
                                                                             E\ SHWLWLRQHUjV DOOHJDWLRQ RI FRQIOLFW  5REHUW %DNHU DQG
  3HWLWLRQHU UDLVHV D QXPEHU RI LVVXHV XQGHU WKH UXEULF RI          5REHUW/RZHU\DFWHGDVFRXUWDSSRLQWHGWULDOFRXQVHO$IWHU
SURVHFXWRULDOPLVFRQGXFW                                                    WKHYHUGLFW%DNHUDQG/RZHU\ZHUHUHSODFHGE\WZRRWKHU
                                                                             DWWRUQH\V3HWHU&DKRRQDQG5LFKDUG.DVD\1HZFRXQVHO
  %DWVRQFKDOOHQJH                                                       ILOHG WKHLU DSSHOODWH EULHI RQ 0DUFK    2QH PRQWK
                                                                             ODWHUZKLOHWKHDSSHDOZDVVWLOOSHQGLQJ3HWHU&DKRRQMRLQHG
   $OWKRXJK QRW SURVHFXWRULDO PLVFRQGXFW LQ WKH WUDGLWLRQDO            %DNHUjVILUP,QSHWLWLRQHUjVH\HVWKLVYLRODWHGKLVULJKWWR
VHQVHSHWLWLRQHUFRQWHQGVWKDWWKHGHFLVLRQRIWKHSURVHFXWRU               XQFRQIOLFWHGFRXQVHO
WRXVHSHUHPSWRU\FKDOOHQJHVWRH[FXVHWKUHHSRWHQWLDOEODFN
MXURUVUDQDIRXORI%DWVRQY.HQWXFN\86                    :KLOHWKHFRXUWVEHORZIRXQGWKDWWKHVHFLUFXPVWDQFHVGLG
7KHUH DUH ZHDNQHVVHV LQ WKLV DUJXPHQW KRZHYHU  )LUVW              QRW JLYH ULVH WR D FRQIOLFW WKLV FRXUW KDV UHFHQWO\ LVVXHG D
GHIHQVHFRXQVHOPDGHQRFRQWHPSRUDQHRXVREMHFWLRQWRWKH                     GHFLVLRQ &RPEV Y &R\OH  )G  WK &LU FHUW
VWULNHV6HFRQGGHIHQVHFRXQVHOWHVWLILHGDWDVXEVHTXHQW                 GHQLHG6&WWKDWLQYROYHVDVLPLODUFODLP
GHSRVLWLRQWKDWKHGLGQRWSHUFHLYHWKDWWKHVWULNHVZHUHEDVHG              ,QWKDWFDSLWDOFDVHSHWLWLRQHUKDGWZRDWWRUQH\VRQDSSHDO
RQUDFLDODQLPXV7KLUGFRXQVHOGLGQRWUDLVHWKLVLVVXHRQ               RQHRIZKRPKDGUHSUHVHQWHGKLPDWWULDO$VKHUHDSSHOODWH
GLUHFWDSSHDOUHVXOWLQJLQSURFHGXUDOGHIDXOWXQGHUWKH3HUU\               FRXQVHOIDLOHGWRUDLVHFHUWDLQLQHIIHFWLYHDVVLVWDQFHRIWULDO
UXOHGLVFXVVHGHDUOLHU$QGIRXUWKWKHUHLVQRWKLQJLQWKH                FRXQVHO FODLPV RQ GLUHFW DSSHDO  +H VRXJKW WR DYRLG
UHFRUGWRVXJJHVWWKDWWKHDOOHJHGLQDSSURSULDWHSURVHFXWRULDO               SURFHGXUDO GHIDXOW E\ DUJXLQJ WKDW EHFDXVH KH ZDV QRW
FRQGXFWUHQGHUHGWKHWULDOIXQGDPHQWDOO\XQIDLUWRDGHJUHH                  UHSUHVHQWHGE\mXQFRQIOLFWHGlFRXQVHORQGLUHFWDSSHDOWKH
                                                                             UXOHHQXQFLDWHGLQ&ROHGLGQRWDSSO\WRKLP:HDJUHHGDQG
                                                                             H[SODLQHGRXUGHFLVLRQLQWKHVHWHUPV
                                                                              %HFDXVH WKHUH LV DPELJXLW\ VXUURXQGLQJ WKH LVVXH DQG
      +H GLG KRZHYHU PDNH D PRWLRQ SULRU WR YRLU GLUH DVNLQJ WKH FRXUW
WR UHTXLUH WKH VWDWH WR SURYLGH D UHDVRQ HDFK WLPH LW XVHG D SHUHPSWRU\ WR
                                                                               EHFDXVH WKH 6WDWH FDQQRW SRLQW WR D FDVH ILUPO\
VWULNH D EODFN MXURU 7KH SURVHFXWRU UHSOLHG WKDW WKH 2KLR FRGH LPSRVHG        HVWDEOLVKLQJ DV RI WKH WLPH RI &RPEVjV DSSHDO WKDW
QR VXFK UHTXLUHPHQW DQG WR GR VR mZRXOG ZKROO\ EOXU WKH GLVWLQFWLRQ            LQHIIHFWLYHQHVVFODLPVPXVWEHEURXJKWRQGLUHFWDSSHDO
EHWZHHQ D FKDOOHQJH IRU FDXVH DQG D SHUHPSWRU\ FKDOOHQJHl       7KH WULDO     ZKHQWULDOFRXQVHODOVRVHUYHVDVFRFRXQVHORQDSSHDO
FRXUW RYHUUXOHG GHIHQVH FRXQVHOjV PRWLRQ EDVHG XSRQ 2KLR 5HY &RGH             ZHDUHXQDEOHWRFRQFOXGHWKDWDILUPO\HVWDEOLVKHGVWDWH
  DQG 2KLR &ULPLQDO 5XOH  7KH WULDO RFFXUUHG RQH \HDU EHIRUH
                                                                               SURFHGXUDOUXOHH[LVWHG,QGHHGDWWKHWLPHRI&RPEVjV
                                                                               DSSHDOZDVILOHGLWZRXOGKDYHEHHQHQWLUHO\UHDVRQDEOH
WKH %DWVRQ GHFLVLRQ


                                                                              WRFRQFOXGHWKDW&RPEVjVQHZFRXQVHOGLGQRWPHHWWKH
     7KH MXU\ ZDV FRPSULVHG RI WHQ ZKLWHV DQG WZR EODFNV       +RZHYHU
VLPSO\ EHFDXVH EODFNV DUH XOWLPDWHO\ VHDWHG RQ D MXU\ GRHV QRW SUHFOXGH
                                                                               &ROH VWDQGDUG RI EHLQJ mLQ QR ZD\ HQMRLQHG IURP
D %DWVRQ FKDOOHQJH 8QLWHG 6WDWHV Y +DUULV    )G   WK &LU     DVVHUWLQJWKHLQHIIHFWLYHQHVVRIDSSHOODQWjVWULDOFRXQVHOl

    *UHHUY0LWFKHOO                             1R     1R                               *UHHUY0LWFKHOO      

  &ROH1(GDWDQGWKXVWKDWUHVMXGLFDWDZRXOG           8QGHUWKHRSHQLQJFODXVHRI HDIDLOXUHWR
  QRWDSSO\                                                          GHYHORS WKH IDFWXDO EDVLV RI D FODLP LV QRW HVWDEOLVKHG
                                                                      XQOHVVWKHUHLVODFNRIGLOLJHQFHRUVRPHJUHDWHUIDXOW
&RPEV  )G DW   2EYLRXVO\ &RPEV LV IDFWXDOO\       DWWULEXWDEOHWRWKHSULVRQHURUWKHSULVRQHUjVFRXQVHO
GLVWLQJXLVKDEOHIURPRXUFDVHEHFDXVHQHLWKHURISHWLWLRQHUjV
WZRDSSHOODWHDWWRUQH\VUHSUHVHQWHGKLPDWWULDO:HWKHUHIRUH     :LOOLDPV86DW)XUWKHUPRUHm>W@KHTXHVWLRQLV
GHFOLQHWRH[WHQG&RPEVWRWKHVLWXDWLRQEHIRUHXVVRDVWR         QRWZKHWKHUWKHIDFWVFRXOGKDYHEHHQGLVFRYHUHGEXWLQVWHDG
H[FXVHWKHSURFHGXUDOGHIDXOWRIKLVLQHIIHFWLYHDVVLVWDQFHRI      ZKHWKHUWKHSULVRQHUZDVGLOLJHQWLQKLVHIIRUWVl,GDW
WULDOFRXQVHOFODLP1HYHUWKHOHVVWKHUHPRWHSRVVLELOLW\WKDW
DSSHOODWHFRXQVHOPLJKWKDYHIHOWFRQVWUDLQHGLQUDLVLQJWKDW         ,Q WKH FDVH EHIRUH XV SHWLWLRQHU SXUVXHG KLV LQHIIHFWLYH
FODLPFRXSOHGZLWKWKHFRQFHUQVDOUHDG\GLVFXVVHGFRXQVHO         DVVLVWDQFHRIDSSHOODWHFRXQVHOFODLPZLWKSURSHUGLOLJHQFH
FDXWLRQZLWKUHVSHFWWRSHWLWLRQHUjVLQHIIHFWLYHDVVLVWDQFHRI      UDLVLQJLWILUVWDOEHLWSUHPDWXUHO\LQKLVSHWLWLRQIRUSRVW
DSSHOODWHFRXQVHOFODLP                                            FRQYLFWLRQ UHOLHI DQG WKHQ LQ KLV PRWLRQ IRU GHOD\HG
                                                                    UHFRQVLGHUDWLRQ  %RWK RI WKHVH SOHDGLQJV UHTXHVWHG DQ
  7KH2KLR&RXUWRI$SSHDOVjRSLQLRQGHQ\LQJSHWLWLRQHUjV           HYLGHQWLDU\KHDULQJZKLFKZDVQHYHUDIIRUGHGE\WKH2KLR
LQHIIHFWLYH DVVLVWDQFH RI DSSHOODWH FRXQVHO FODLP SURYLGHV    FRXUWV  &RQVLVWHQW ZLWK :LOOLDPV Y 7D\ORU WKHUHIRUH ZH
VFDQWVXEVWDQWLYHUHDVRQLQJ                                        FRQFOXGHWKDWSHWLWLRQHULVQRWSUHFOXGHGIURPDQHYLGHQWLDU\
                                                                    KHDULQJDVKHH[HUFLVHGWKHQHFHVVDU\GLOLJHQFHLQDWWHPSWLQJ
    $SSHOODQW KDV QRW PHW WKH VWDQGDUG VHW IRUWK LQ         WRHVWDEOLVKWKHIDFWXDOUHFRUGLQVWDWHFRXUW
  6WULFNODQGY:DVKLQJWRQ86WR
  HVWDEOLVK LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO  )URP WKH       $FFRUGLQJO\ ZH UHPDQG WKLV PDWWHU WR WKH GLVWULFW FRXUW
  UHFRUGZHFDQQRWILQGWKDWWKHDSSHOODQWZDVLQDQ\ZD\           ZLWKLQVWUXFWLRQVWRDFFRUGSHWLWLRQHUDQHYLGHQWLDU\KHDULQJ
  SUHMXGLFHGE\DSSHOODWHFRXQVHOjVSHUIRUPDQFHWKDWLV           LQ ZKLFK WR HVWDEOLVK ZKHWKHU DSSHOODWH FRXQVHO UHQGHUHG
  WKDW KLV FRQYLFWLRQ ZRXOG KDYH EHHQ VHW DVLGH E\ WKLV    FRQVWLWXWLRQDOO\ LQHIIHFWLYH DVVLVWDQFH ZLWK UHVSHFW WR WKH
  &RXUW                                                            SHQDOW\SKDVHRISHWLWLRQHUjVWULDO
6WDWH Y *UHHU 1R  2KLR &W $SS )HE     &2KLRjV3RVW&RQYLFWLRQ6FKHPH
XQUHSRUWHG sRXUQDO (QWU\ DW  s$ DW 
)XUWKHUPRUH SHWLWLRQHU  ZDV QRW DIIRUGHG DQ HYLGHQWLDU\       3HWLWLRQHU FRQWHQGV WKDW 2KLRjV SRVWFRQYLFWLRQ VFKHPH
KHDULQJWRGHYHORSKLVLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOFODLP      IDLOVWRSURYLGHGHIHQGDQWVDQDGHTXDWHFRUUHFWLYHSURFHVVIRU
E\HLWKHUVWDWHFRXUWVRUWKHGLVWULFWFRXUW:HDUHRIFRXUVH   UHYLHZLQJFODLPVRIFRQVWLWXWLRQDOYLRODWLRQV
PLQGIXO WKDW WKH $('3$  86&  H SHUPLWV D
GLVWULFWFRXUWWRKROGDQHYLGHQWLDU\KHDULQJRQO\LQOLPLWHG        7KHGLVWULFWFRXUWFRQFOXGHGWKDWKDEHDVFRUSXVFDQQRWEH
FLUFXPVWDQFHV  6HH  86&  H  +RZHYHU LQ   XVHG WR PRXQW FKDOOHQJHV WR D VWDWHjV VFKHPH RI SRVW
:LOOLDPVWKH6XSUHPH&RXUWH[SODLQHGWKHVHOLPLWDWLRQVLQD        FRQYLFWLRQUHOLHIUHO\LQJXSRQ.LUE\Y'XWWRQ)G
PDQQHUWKDWZHUHDGWRIDYRUDQHYLGHQWLDU\KHDULQJLQWKLV         WK&LUKDEHDVFRUSXVLVQRWWKHSURSHUPHDQVE\
FDVH&RQFHUQLQJWKHVWDWXWHjVFRPPDQGWKDWQRHYLGHQWLDU\         ZKLFK SULVRQHUV VKRXOG FKDOOHQJH HUURUV RU GHILFLHQFLHV LQ
KHDULQJVKDOORFFXUZKHQDSHWLWLRQHUKDVmIDLOHGWRGHYHORS        VWDWHSRVWFRQYLFWLRQSURFHHGLQJV0RUHRYHUWKH6XSUHPH
WKHIDFWXDOEDVLVRIDFODLPlWKH&RXUWRIIHUHGWKHIROORZLQJ      &RXUWKDVKHOGWKDWVWDWHVKDYHQRFRQVWLWXWLRQDOREOLJDWLRQWR
LQWHUSUHWDWLRQ                                                    SURYLGH SRVWFRQYLFWLRQ UHPHGLHV  6HH 3HQQV\OYDQLD Y
                                                                    )LQOH\86WKHUHLVQRFRQVWLWXWLRQDO
