       5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
            3XUVXDQW WR 6L[WK &LUFXLW 5XOH                     9DNLOLDQY6KDZHWDO                 1RV
   (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
               )LOH 1DPH DS
                                                           %HIRUH6,/(5DQG0225(&LUFXLWsXGJHV0F.,1/(<
                                                                               'LVWULFWsXGJH
81,7('67$7(6&28572)$33($/6                                                    BBBBBBBBBBBBBBBBB
              )257+(6,;7+&,5&8,7                                                    &2816(/
                BBBBBBBBBBBBBBBBB
                                                           $5*8('  0DUN ( 'RQQHOO\ 2)),&( 2) 7+(
                                                           $77251(<*(1(5$//DQVLQJ0LFKLJDQIRU$SSHOODQW
6$ 9$.,/,$1$GPLQLVWUDWRU ;                             +XJK 0 'DYLV sU &2167,787,21$/ /,7,*$7,21
RIWKH(67$7( 2)                                          $662&,$7(6 'HWURLW 0LFKLJDQ IRU $SSHOOHH
                                                          21 %5,()  0DUN 6 0HDGRZV 2)),&( 2) 7+(
02+$00$' 0 9$.,/,$1                                      $77251(<*(1(5$//DQVLQJ0LFKLJDQIRU$SSHOODQW
                                      1RV
0'                                                     +XJK 0 'DYLV sU &2167,787,21$/ /,7,*$7,21
             3ODLQWLII$SSHOOHH !                         $662&,$7(6'HWURLW0LFKLJDQIRU$SSHOOHH
                                   
               &URVV$SSHOODQW 
                                                                                  BBBBBBBBBBBBBBBBB
                                   
            Y                                                                       23,1,21
                                                                                 BBBBBBBBBBBBBBBBB
:(6/(< 6+$:                       
                                                            6,/(5 &LUFXLW sXGJH  ,Q WKLV LQWHUORFXWRU\ DSSHDO
          'HIHQGDQW$SSHOODQW 
                                                           'HIHQGDQW :HVOH\ 6KDZ 6SHFLDO $JHQW IRU WKH 0LFKLJDQ
                &URVV$SSHOOHH                           $WWRUQH\*HQHUDOjV2IILFHDSSHDOVWKHGLVWULFWFRXUWjVGHQLDO
                                                          RIDEVROXWHDQGTXDOLILHGLPPXQLW\UHJDUGLQJFODLPVEURXJKW
5,&+$5' / .2(1,*6.1(&+7                                 E\WKHHVWDWHRI'U0RKDPPDG09DNLOLDQSXUVXDQWWR
           'HIHQGDQW$SSHOOHH                            86&   DQG  IRU DOOHJHG YLRODWLRQV RI
                                                          9DNLOLDQjVFRQVWLWXWLRQDOULJKWVGXULQJWKHVWDWHjVLQYHVWLJDWLRQ
                                  1                        DQGSURVHFXWLRQRIKLPIRU0HGLFDLGIUDXG9DNLOLDQFURVV
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW        DSSHDOV UHTXHVWLQJ WKDW ZH H[HUFLVH RXU SHQGHQW DSSHOODWH
    IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW$QQ$UERU     MXULVGLFWLRQ WR UHYHUVH WKH GLVWULFW FRXUWjV RUGHU JUDQWLQJ
   1Rn0DULDQQH2%DWWDQL'LVWULFWsXGJH       VXPPDU\ MXGJPHQW LQ IDYRU RI 'HIHQGDQW 5LFKDUG
                                                           .RHQLJVNQHFKW$VVLVWDQW$WWRUQH\*HQHUDOIRUWKH6WDWHRI
              $UJXHG2FWREHU                    0LFKLJDQEDVHGRQDEVROXWHSURVHFXWRULDOLPPXQLW\)RUWKH
                                                           UHDVRQV VWDWHG EHORZ ZH $)),50 WKH GHQLDO RI DEVROXWH
            'HFLGHGDQG)LOHGsXO\               LPPXQLW\ WR 6KDZ  :H DOVR $)),50 LQ SDUW DQG
                                                           5(9(56(LQSDUWWKHGLVWULFWFRXUWjVGHFLVLRQGHQ\LQJKLP

                                                               
                                                                7KH +RQRUDEOH sRVHSK + 0F.LQOH\ sU 8QLWHG 6WDWHV 'LVWULFW
                                                           sXGJH IRU WKH :HVWHUQ 'LVWULFW RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ



                           
1RV                 9DNLOLDQY6KDZHWDO                  9DNLOLDQY6KDZHWDO                           1RV

TXDOLILHG LPPXQLW\  :LWK UHVSHFW WR WKH FODLPV DJDLQVW         $IWHUUHYLHZLQJWKLVHYLGHQFH.RHQLJVNQHFKWDXWKRUL]HGD
.RHQLJVNQHFKW ZH FKRRVH WR H[HUFLVH RXU GLVFUHWLRQ WR        FRPSODLQW DJDLQVW 9DNLOLDQ DORQJ ZLWK VHYHUDO RWKHU
$)),50 WKH JUDQW RI VXPPDU\ MXGJPHQW RQ WKH )RXUWK           SK\VLFLDQV FKDUJLQJ WKHP ZLWK PXOWLSOH YLRODWLRQV RI WKH
$PHQGPHQWFODLPEXWGHFOLQHWRH[HUFLVHSHQGHQWDSSHOODWH           0LFKLJDQ)DOVH&ODLPV$FW0)&$ZKLFKPDNHVLWLOOHJDO
MXULVGLFWLRQWRUHYLHZWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\         WRUHFHLYHDNLFNEDFNIRURUGHULQJWHVWVFRYHUHGE\0HGLFDLG
MXGJPHQWWR.RHQLJVNQHFKWRQWKHFODLP                    6KDZWKHQWRRNWKHFRPSODLQWVWRWKHVWDWHGLVWULFWFRXUWIRU
                                                                     WKH SXUSRVH RI REWDLQLQJ DUUHVW ZDUUDQWV IRU DOO RI WKH
                      %$&.*5281'                                     SK\VLFLDQV  :KHQ WHVWLI\LQJ 6KDZ WROG WKH MXGJH WKDW
                                                                     9DNLOLDQ mUHFHLYHG DGGLWLRQDO PRQH\ DERYH ZKDW KHjV
  )ROORZLQJWKHGLVPLVVDORIFULPLQDOFKDUJHV6$9DNLOLDQ        VXSSRVHGWRJHWE\>RUGHULQJ@H[FHVVLYHDPRXQWVRIWHVWVl
DGPLQLVWUDWRU RI WKH HVWDWH RI WKH ODWH 0RKDPPDG 0          DQGLQGLFDWHGWKDWm>W@KHUHZDVDJUHHPHQWEHWZHHQ>9DNLOLDQ@
9DNLOLDQ0'VXHG.RHQLJVNQHFKWDQG6KDZVHHNLQJUHOLHI          DQGWKHRZQHU'U%DLJWR>@SHUIRUPWKHVHVHUYLFHVDQGWKDW
XQGHU86&DQGIRUDOOHJHGYLRODWLRQV           KH ZRXOG UHFHLYH PRQH\ IRU KLV VHUYLFHVl  9DNLOLDQ ZDV
RI9DNLOLDQjVFLYLODQGFRQVWLWXWLRQDOULJKWVGXULQJWKHVWDWHjV     VXEVHTXHQWO\FKDUJHGDQGERXQGRYHUIRUWULDO
LQYHVWLJDWLRQDQGSURVHFXWLRQRIKLPIRU0HGLFDLGIUDXG7KH
FRPSODLQWDOOHJHGWKDW.RHQLJVNQHFKWDQG6KDZFRQVSLUHGWR             2Q1RYHPEHUWKH:D\QH&RXQW\&LUFXLW&RXUW
YLRODWH9DNLOLDQjV)RXUWKDQG)RXUWHHQWK$PHQGPHQWULJKWV            UHYHUVHG WKH ILQGLQJ RI WKH GLVWULFW FRXUW DQG TXDVKHG WKH
E\ SURVHFXWLQJ KLP ZLWKRXW SUREDEOH FDXVH DQG WKDW WKH       LQIRUPDWLRQ  7KH 0LFKLJDQ &RXUW RI $SSHDOV XSKHOG WKH
GHIHQGDQWVj DFWLRQV ZHUH PRWLYDWHG E\ DQLPXV WRZDUG            GLVPLVVDO RI WKH FKDUJHV FLWLQJ D ODFN RI HYLGHQFH WKDW
9DNLOLDQEHFDXVHRIKLVHWKQLFLW\RUQDWLRQDORULJLQ               9DNLOLDQNQRZLQJO\UHFHLYHGDNLFNEDFNDQHFHVVDU\HOHPHQW
                                                                     RIWKHFKDUJH$WWKHWLPH6KDZWHVWLILHGEHIRUHWKHGLVWULFW
   ,Q  6KDZ ZDV DVVLJQHG WR D IHGHUDO WDVN IRUFH WR   FRXUW WKH 0)&$ GLG QRW FRQWDLQ DQ HOHPHQW RI LQWHQW RU
LQYHVWLJDWH 9DNLOLDQjV HPSOR\HU  m+HDOWK 6WRSl PHGLFDO        NQRZOHGJH  +RZHYHU DIWHU 9DNLOLDQ ZDV FKDUJHG WKH
FOLQLFV IRU VXVSHFWHG 0HGLFDLG IUDXG  7KH WDVN IRUFH       0LFKLJDQ&RXUWRI$SSHDOVUXOHGWKDWJHQHUDOLQWHQWZDVD
H[HFXWHGVHDUFKZDUUDQWVIRUUHFRUGVDQGLQWHUYLHZHGVHYHUDO         UHTXLUHPHQWXQGHUWKHVWDWXWH
SDWLHQWV HPSOR\HHV DQG GRFWRUV DW DOO IRXU +HDOWK 6WRS
ORFDWLRQV7KHLQYHVWLJDWLRQXOWLPDWHO\UHYHDOHGDV\VWHPRI          7KHHVWDWHVXEVHTXHQWO\ILOHGWKLVFLYLODFWLRQSXUVXDQWWR
LOOHJDO NLFNEDFNV WR HPSOR\HHSK\VLFLDQV LQ WKH IRUP RI       86&FODLPLQJWKDWWKHGHIHQGDQWVLQGLYLGXDOO\DQG
PRQWKO\ERQXVHVWKDWZHUHEDVHGXSRQWKHQXPEHURIPHGLFDO           DV SDUW RI D FRQVSLUDF\ YLRODWHG 9DNLOLDQjV )RXUWK
WHVWVRUGHUHGE\WKHSK\VLFLDQV6HYHUDOSK\VLFLDQVDGPLWWHG        $PHQGPHQWULJKWVE\DUUHVWLQJDQGSURVHFXWLQJKLPZLWKRXW
WKDWWKH\ZLOOLQJO\SDUWLFLSDWHGLQWKHVFKHPH                      SUREDEOHFDXVH7KHWKHRU\RI9DNLOLDQjVFDVHLVWKDW6KDZ
  $OWKRXJK WKHUH ZDV QR GLUHFW HYLGHQFH VKRZLQJ WKDW
9DNLOLDQ NQHZ WKDW KH ZDV UHFHLYLQJ DQ LOOHJDO NLFNEDFN
FLUFXPVWDQWLDO HYLGHQFH LPSOLFDWHG KLV SDUWLFLSDWLRQ LQ WKH        
                                                                          7KH 0)&$ SURYLGHV LQ UHOHYDQW SDUW m$ SHUVRQ ZKR VROLFLWV RIIHUV
VFKHPH+LVHPSOR\PHQWFRQWUDFWFRQWDLQHGWKHVDPHERQXV            RU UHFHLYHV D NLFNEDFN RU EULEH LQ FRQQHFWLRQ ZLWK WKH IXUQLVKLQJ RI JRRGV

SURYLVLRQDVVHYHUDOLQGLYLGXDOVZKRDGPLWWHGOLDELOLW\DQG         RU VHUYLFHV IRU ZKLFK SD\PHQW LV RU PD\ EH PDGH LQ ZKROH RU LQ SDUW

UHFRUGVHVWDEOLVKHGWKDWKLVPRQWKO\ERQXVHVZHUHEDVHGXSRQ         SXUVXDQW WR D SURJUDP HVWDEOLVKHG XQGHU $FW 1R  RI WKH 3XEOLF $FWV

WKHQXPEHURIPHGLFDOWHVWVKHRUGHUHGIRUKLVSDWLHQWV            RI  > @ DV DPHQGHG ZKR PDNHV RU UHFHLYHV WKH SD\PHQW RU ZKR
                                                                     UHFHLYHV D UHEDWH RI D IHH RU FKDUJH IRU UHIHUULQJ DQ LQGLYLGXDO WR DQRWKHU
                                                                     SHUVRQ    IRU   WKH   IXUQLVKLQJ   RI   WKH   JRRGV   DQG   VHUYLFHV   LV   JXLOW\   RI   D
                                                                     IHORQ\   l 0&/ 
1RV                      9DNLOLDQY6KDZHWDO                     9DNLOLDQY6KDZHWDO                  1RV

RQ WKH DGYLFH RI .RHQLJVNQHFKW NQRZLQJO\ JDYH IDOVH RU                                        s85,6',&7,21
PLVOHDGLQJ WHVWLPRQ\ WR WKH MXGJH LQ RUGHU WR GHPRQVWUDWH
SUREDEOH FDXVH IRU DQ DUUHVW ZDUUDQW  7KH FRPSODLQW DOVR              $QDSSHDOIURPWKHGHQLDORITXDOLILHGLPPXQLW\PD\EH
DOOHJHV WKDW WKH GHIHQGDQWVj DFWLRQV ZHUH PRWLYDWHG E\                 UHYLHZHGRQLQWHUORFXWRU\DSSHDOXQGHU0LWFKHOOY)RUV\WK
QDWLRQDO RULJLQ GLVFULPLQDWLRQ DQG WKH GHIHQGDQWV DUH                  86WRWKHH[WHQWWKDWLWUDLVHVTXHVWLRQVRI
WKHUHIRUHOLDEOHXQGHU86&IRUFRQVSLULQJWR                  ODZ'LFNHUVRQY0F&OHOODQ)GWK&LU
GHSULYH9DNLOLDQRIHTXDOSURWHFWLRQRIWKHODZ6SHFLILFDOO\              0L[HGTXHVWLRQVRIODZDQGIDFWDUHWUHDWHGDVOHJDO
WKHHVWDWHDUJXHVWKDW9DNLOLDQDQ$PHULFDQFLWL]HQZKRZDV                  TXHVWLRQVIRUSXUSRVHVRIRXUUHYLHZ6HH:LOODPVY0HKUD
ERUQLQ,UDQZDVVXEMHFWHGWRGLVFULPLQDWRU\WUHDWPHQWZKHQ                   )G   WK &LU  HQ EDQF  'HQLDOV RI
WKHWDVNIRUFHFKRVHQRWWRLQWHUYLHZKLPDVWKH\GLGRWKHU                  TXDOLILHG LPPXQLW\ KRZHYHU FDQQRW EH UHYLHZHG WR WKH
SRWHQWLDO$QJOR$PHULFDQVXVSHFWVGHVSLWHNQRZLQJWKDWQRW                   H[WHQWWKDWWKHGHIHQGDQWVHHNVWRFKDOOHQJHWKHGLVWULFWFRXUWjV
DOO GRFWRUVZKRUHFHLYHGWKHERQXVZHUHDZDUHWKDWLWZDV                    GHWHUPLQDWLRQ WKDW WKH HYLGHQFH ZDV VXIILFLHQW WR SHUPLW D
GHULYHGIURPLOOHJDOPHDQV7KHHVWDWHDOVRFLWHVHYLGHQFH                   SDUWLFXODUILQGLQJRIIDFWsRKQVRQYsRQHV86
WKDW WHQ IRUHLJQERUQ $VLDQ SK\VLFLDQV DQG RQH sHZLVK                   7KHUHIRUH ZH KDYH MXULVGLFWLRQ WR FRQVLGHU
$PHULFDQ SK\VLFLDQ ZHUH SURVHFXWHG ZKHUHDV WKUHH ZKLWH                 ZKHWKHU WKH SODLQWLIIjV YHUVLRQ RI IDFWV GHPRQVWUDWHV D
$PHULFDQ QRQsHZLVK SK\VLFLDQV ZKR DGPLWWHG WR                         YLRODWLRQRIFOHDUO\HVWDEOLVKHGULJKWVXQGHUWKH)RXUWKDQG
SDUWLFLSDWLRQLQWKHLOOHJDOVFKHPHZHUHQRW                               )RXUWHHQWK$PHQGPHQWV
   .RHQLJVNQHFKWDQG6KDZILOHGDPRWLRQWRGLVPLVVDQGIRU                                     67$1'$5'2)5(9,(:
VXPPDU\MXGJPHQWZLWKVXSSRUWLQJDIILGDYLWV9DNLOLDQILOHG
D UHVSRQVH VXSSRUWHG E\ GRFXPHQWDWLRQ REWDLQHG IURP WKH                   :HUHYLHZWKHGLVWULFWFRXUWjVGHFLVLRQWRGHQ\DPRWLRQIRU
HDUOLHU FULPLQDO FDVH  7KH GLVWULFW FRXUW JUDQWHG VXPPDU\            VXPPDU\ MXGJPHQW EDVHG RQ TXDOLILHG LPPXQLW\ GH QRYR
MXGJPHQWWR.RHQLJVNQHFKWRQDOOIHGHUDOFODLPVEDVHGXSRQ                    6WHPOHU Y &LW\ RI )ORUHQFH  )G   WK &LU
DEVROXWHLPPXQLW\,WGHFOLQHGWRJUDQWLPPXQLW\WR6KDZ                    %HFDXVHWKHGLVWULFWFRXUWFRQVLGHUHGPDWWHUVRXWVLGH
KRZHYHU RQ JURXQGV WKDW D IDFWXDO GLVSXWH UHPDLQHG DV WR            WKH SOHDGLQJV LQ UHQGHULQJ LWV GHFLVLRQ RQ WKH GHIHQGDQWjV
ZKHWKHUKHDFWHGZLWKLQWHQWRUGLVFULPLQDWRU\DQLPXV                        PRWLRQWRGLVPLVVDQGIRUVXPPDU\MXGJPHQWWKHGHFLVLRQ
                                                                              ZLOOEHWUHDWHGDVRQHIRUVXPPDU\MXGJPHQW6HH+LJJDVRQ
                                                                              Y 6WHSKHQV  )G   WK &LU  FLWLQJ
                                                                              6DOHSKSRXU Y 8QLY RI 7HQQ  )G   WK &LU
    
      86&   VWDWHV LQ UHOHYDQW SDUW                             6XPPDU\MXGJPHQWEDVHGRQTXDOLILHGLPPXQLW\LV
                                                                              SURSHU LI WKH ODZ GLG QRW SXW WKH RIILFHU RQ QRWLFH WKDW KLV
    ,I WZR RU PRUH SHUVRQV LQ DQ\ 6WDWH RU 7HUULWRU\ FRQVSLUH   IRU        FRQGXFWZRXOGEHFOHDUO\XQODZIXO,GDW+RZHYHULI
    WKH SXUSRVH RI GHSULYLQJ HLWKHU GLUHFWO\ RU LQGLUHFWO\ DQ\ SHUVRQ
    RU FODVV RI SHUVRQV RI WKH HTXDO SURWHFWLRQ RI WKH ODZV RU RI
                                                                              JHQXLQHLVVXHVRIPDWHULDOIDFWH[LVWDVWRZKHWKHUWKHRIILFHU
    HTXDO SULYLOHJHV DQG LPPXQLWLHV XQGHU WKH ODZV    LQ DQ\ FDVH
    RI FRQVSLUDF\ VHW IRUWK LQ WKLV VHFWLRQ LI RQH RU PRUH SHUVRQV
    HQJDJHG WKHUHLQ GR RU FDXVH WR EH GRQH DQ\ DFW LQ IXUWKHUDQFH
                                                                                  
    RI WKH REMHFW RI VXFK FRQVSLUDF\ ZKHUHE\ DQRWKHU LV LQMXUHG LQ                 $OWKRXJK 9DNLOLDQ XUJHV WKDW KH EH DOORZHG DGGLWLRQDO GLVFRYHU\
    KLV SHUVRQ RU SURSHUW\ RU GHSULYHG RI KDYLQJ DQG H[HUFLVLQJ DQ\          QRWLQJ WKDW KLV FODLP ZDV GLVPLVVHG EHIRUH GLVFRYHU\ KDG WDNHQ SODFH LQ
    ULJKW RU SULYLOHJH RI D FLWL]HQ RI WKH 8QLWHG 6WDWHV WKH SDUW\ VR        WKH FLYLO PDWWHU KH GRHV QRW DUJXH WKDW KH ZDV QRW JLYHQ WKH RSSRUWXQLW\
    LQMXUHG RU GHSULYHG PD\ KDYH DQ DFWLRQ IRU WKH UHFRYHU\ RI                WR SUHVHQW HYLGHQFH DQG UHVSRQG WR WKH GHIHQGDQWVj PRWLRQ WR GLVPLVV DQG
    GDPDJHV RFFDVLRQHG E\ VXFK LQMXU\ RU GHSULYDWLRQ DJDLQVW DQ\             IRU VXPPDU\ MXGJPHQW 7KHUHIRUH ZH ZLOO WUHDW WKH GLVWULFW FRXUWjV UXOLQJ
    RQH RU PRUH RI WKH FRQVSLUDWRUV                                          DV RQH IRU VXPPDU\ MXGJPHQW EDVHG RQ TXDOLILHG LPPXQLW\
1RV                    9DNLOLDQY6KDZHWDO                  9DNLOLDQY6KDZHWDO               1RV

FRPPLWWHGDFWVWKDWZRXOGYLRODWHDFOHDUO\HVWDEOLVKHGULJKW             DFFRUGHGWHVWLI\LQJZLWQHVVHVWRDSROLFHRIILFHUZKRJDYH
WKHQVXPPDU\ MXGJPHQWLVLPSURSHU3RHY+D\GRQ                    SHUMXUHG WHVWLPRQ\ DW D FULPLQDO WULDO  7KH XQGHUO\LQJ
)GWK&LU                                          UDWLRQDOHRIWKHGHFLVLRQZDVWKDWWKHRIILFHUIXQFWLRQHGDVDQ
                                                                           RUGLQDU\ZLWQHVVVXEMHFWWRWKHDGYHUVDU\SURFHVVLQKHUHQWLQ
                          ',6&866,21                                       DWULDO,QWKLVFDVHKRZHYHU6KDZWHVWLILHGDWDQH[SDUWH
                                                                           SURFHHGLQJZKHUHKLVDFWLRQVZHUHWKDWRIDmFRPSODLQLQJ
$$EVROXWH,PPXQLW\IRU6KDZ                                             ZLWQHVVl UDWKHU WKDQ D mWHVWLI\LQJ ZLWQHVVl  %HFDXVH D
                                                                           FRPSODLQLQJZLWQHVVLVQRWSURWHFWHGE\DEVROXWHLPPXQLW\
  6KDZFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGLQGHQ\LQJKLV               QHLWKHULV6KDZ6HH.DOLQDY)OHWFKHU86
FODLPWRDEVROXWHLPPXQLW\+HDUJXHVWKDWHYHQDVVXPLQJ                 ,UHODQG)GDW$FFRUGLQJO\ZHKROG
KH NQRZLQJO\ PDGH IDOVH VWDWHPHQWV WR WKH MXGJH KH LV            WKDWWKHGLVWULFWFRXUWGLGQRWHUULQGHQ\LQJ6KDZjVFODLPWR
QHYHUWKHOHVVHQWLWOHGWRDEVROXWHLPPXQLW\IRUIXQFWLRQLQJDV              DEVROXWHLPPXQLW\IURPGDPDJHV
DQRIILFLDOZKRSHUIRUPVDFULWLFDOUROHLQWKHMXGLFLDOSURFHVV
$OWHUQDWLYHO\ 6KDZ DVVHUWV WKDW KH LV HQWLWOHG WR DEVROXWH        % 4XDOLILHGLPPXQLW\IRU6KDZ
LPPXQLW\IRUWHVWLI\LQJDVDZLWQHVV:HGLVDJUHH
                                                                              :HQRZWXUQWRWKHTXHVWLRQRIZKHWKHU6KDZLVHQWLWOHGWR
   7KLVFRXUWKDVSUHYLRXVO\KHOGWKDWZKHUHDQLQYHVWLJDWRU               TXDOLILHG LPPXQLW\ ZLWK UHVSHFW WR 9DNLOLDQjV )RXUWK DQG
WHVWLILHVWRWKHIDFWXDOEDVLVRIDFULPLQDOFRPSODLQWEHIRUHD            )RXUWHHQWK$PHQGPHQWFODLPV4XDOLILHGLPPXQLW\VKLHOGV
MXGLFLDORIILFHUKHLVHQWLWOHGWRTXDOLILHGLPPXQLW\RQO\,Q           JRYHUQPHQWRIILFLDOVDFWLQJZLWKLQWKHVFRSHRIWKHLURIILFLDO
,UHODQGY7XQLVZHGHFOLQHGWRH[WHQGDEVROXWHLPPXQLW\WR               GXWLHVIURPFLYLOOLDELOLW\LQVRIDUDVWKHLUFRQGXFWGRHVQRW
DQLQYHVWLJDWRUZKRVZRUHRXWDQDUUHVWZDUUDQWDQGH[SOLFLWO\             YLRODWHFOHDUO\HVWDEOLVKHGULJKWVRIZKLFKDUHDVRQDEOHSHUVRQ
UHMHFWHG WKH DUJXPHQW WKDW WKH RIILFHUjV DFWLRQV ZHUH               ZRXOGKDYHNQRZQ+DUORZY)LW]JHUDOG86
DQDORJRXV WR WKRVH RI D SURVHFXWRU DQG WKXV ZDUUDQWHG              7KHSXUSRVHRIWKHTXDOLILHGLPPXQLW\GHIHQVHLV
FRPSOHWHLPPXQLW\IURPVXLW)GWK&LU                WRSURWHFWSXEOLFRIILFLDOVmIURPXQGXHLQWHUIHUHQFHZLWKWKHLU
UHMHFWLQJWKH7HQWK&LUFXLWjVUHDVRQLQJLQ5REHUWVY               GXWLHV DQG IURP SRWHQWLDOO\ GLVDEOLQJ WKUHDWV RI OLDELOLW\l
.OLQJ  )G  WK &LU  ZKLFK KHOG WKDW DQ         %ODNHY:ULJKW)GWK&LUTXRWLQJ
LQYHVWLJDWRUZDVDEVROXWHO\LPPXQHIURPVXLWIRUVZHDULQJ                  +DUORZ86DW7KXVZKHWKHUDQRIILFLDOLVHQWLWOHG
RXWDFULPLQDOFRPSODLQWEHIRUHDMXGJHRQJURXQGVWKDWKLV                WRTXDOLILHGLPPXQLW\LVDWKUHVKROGTXHVWLRQWREHUHVROYHG
DFWLRQV ZHUH DQDORJRXV WR WKRVH RI D SURVHFXWRU  :H             DWWKHHDUOLHVWSRVVLEOHSRLQWLQWKHSURFHHGLQJV6HH+DUORZ
UHDVRQHG WKDW IRU LPPXQLW\ SXUSRVHV mWKH DFWLRQ RI DQ            86DW
µRIILFHU DSSO\LQJ IRU D ZDUUDQW  ZKLOH D YLWDO SDUW RI WKH
DGPLQLVWUDWLRQRIFULPLQDOMXVWLFHLVIXUWKHUUHPRYHGIURPWKH               ,Q GHWHUPLQLQJ DQ RIILFHUjV HQWLWOHPHQW WR TXDOLILHG
MXGLFLDO SKDVH RI FULPLQDO SURFHHGLQJV WKDQ WKH DFW RI D          LPPXQLW\ZHIROORZDWZRVWHSLQTXLU\6DXFLHUY.DW]
SURVHFXWRULQVHHNLQJDQLQGLFWPHQWjl,GDWTXRWLQJ               86     )LUVW WDNHQ LQ WKH OLJKW PRVW
0DOOH\Y%ULJJV867KXV6KDZ                IDYRUDEOHWRWKHSODLQWLIIZHGHFLGHZKHWKHUWKHIDFWVDOOHJHG
LV QRW HQWLWOHG WR DEVROXWH LPPXQLW\ IRU KLV UROH LQ WKH         VKRZWKHRIILFHUjVFRQGXFWYLRODWHGDFRQVWLWXWLRQDOULJKW,G
LVVXDQFHRIWKHDUUHVWZDUUDQW                                            DW,IQRFRQVWLWXWLRQDOULJKWZRXOGKDYHEHHQYLRODWHG
                                                                           ZHUHWKHSODLQWLIIjVDOOHJDWLRQVHVWDEOLVKHGWKHUHLVQRQHHG
  1RULV6KDZHQWLWOHGWRDEVROXWHLPPXQLW\DVDWHVWLI\LQJ                IRUIXUWKHULQTXLU\LQWRLPPXQLW\,IDYLRODWLRQFDQEHPDGH
ZLWQHVV  ,Q %ULVFRH Y /DKXH  86   WKH
6XSUHPH &RXUW H[WHQGHG DEVROXWH LPPXQLW\ QRUPDOO\
1RV                  9DNLOLDQY6KDZHWDO               9DNLOLDQY6KDZHWDO                  1RV

RXW RQ D IDYRUDEOH YLHZ RI WKH SODLQWLIIjV VXEPLVVLRQV ZH    IDOVHLQIRUPDWLRQXVHGWRSURFXUHDVHDUFKZDUUDQWZDVDNH\
QH[WDVNZKHWKHUWKHULJKWZDVFOHDUO\HVWDEOLVKHG,G             LVVXHLQGHFLGLQJZKHWKHUWRJUDQWTXDOLILHGLPPXQLW\,Q
                                                                       RWKHUZRUGV9DNLOLDQPXVWVKRZWKDWWKHMXGJHZRXOGQRW
     )RXUWK$PHQGPHQW&ODLP                                          KDYHLVVXHGWKHZDUUDQWZLWKRXWWKHDOOHJHGO\IDOVHPDWHULDO
   6KDZ DUJXHV WKDW WKH GLVWULFW FRXUW HUUHG LQ GHQ\LQJ KLP      5HO\LQJRQRXUGHFLVLRQLQ+LOO)G9DNLOLDQILUVW
TXDOLILHGLPPXQLW\RQWKHFODLPWKDWKHSURFXUHGWKHDUUHVW            DUJXHVWKDWWKHLVVXHRISUREDEOHFDXVHLVIRUWKHMXU\ZKHUH
ZDUUDQWWKURXJKIDOVHWHVWLPRQ\+HFRQWHQGVWKDWWKHUHZDV           WKHUHLVDQDOOHJDWLRQRIDIDOVHVZHDULQJWRREWDLQDZDUUDQW
SUREDEOHFDXVHWRDUUHVW9DNLOLDQGHVSLWHWKHDOOHJHGO\IDOVH          7KLV LV LQFRUUHFW  $OWKRXJK LQ +LOO ZH YDFDWHG D GLUHFWHG
VWDWHPHQWVDQGWKHUHIRUHWKHHVWDWHFDQQRWGHPRQVWUDWHWKDW         YHUGLFW LQ IDYRU RI WKH GHIHQGDQW RIILFHU DQG KHOG WKDW WKH
9DNLOLDQjV)RXUWK$PHQGPHQWULJKWVZHUHYLRODWHG                     TXHVWLRQRImZKHWKHUWKHMXGLFLDORIILFHULVVXLQJWKHZDUUDQW
                                                                       ZRXOGKDYHGRQHVRHYHQZLWKRXWWKHNQRZLQJO\RUUHFNOHVVO\
   7KH )RXUWK $PHQGPHQW UHTXLUHV WKDW DUUHVW ZDUUDQWV EH        IDOVHVWDWHPHQWLVRQHIRUWKHMXU\lTXDOLILHGLPPXQLW\ZDV
LVVXHG RQO\ XSRQ D VKRZLQJ RI SUREDEOH FDXVH  *UHHQH Y     QRW DW LVVXH  ,G DW   :KHUH TXDOLILHG LPPXQLW\ LV
5HHYHV)GWK&LU,QDFLYLOULJKWV         DVVHUWHGWKHLVVXHRISUREDEOHFDXVHLVRQHIRUWKHFRXUWVLQFH
FDVHLQYHVWLJDWRUVDUHHQWLWOHGWRUHO\RQDMXGLFLDOO\VHFXUHG       mWKH HQWLWOHPHQW LV LPPXQLW\ IURP VXLW UDWKHU WKDQ D PHUH
DUUHVW ZDUUDQW DV VDWLVIDFWRU\ HYLGHQFH RI SUREDEOH FDXVH      GHIHQVHWROLDELOLW\l+XQWHUY%U\DQW86
<DQFH\ Y &DUUROO &RXQW\  )G   WK &LU       TXRWLQJ0LWFKHOO86DWVHHDOVR%XUGD
 FLWDWLRQV RPLWWHG  +RZHYHU mDQ RIILFHU >RU            %URV,QFY:DOVK1R:/DW
LQYHVWLJDWRU@ FDQQRW UHO\ RQ D MXGLFLDO GHWHUPLQDWLRQ RI        QWK&LU2FWXQSXEOLVKHGRSLQLRQm,WLVFOHDU
SUREDEOH FDXVH LI WKDW RIILFHU NQRZLQJO\ PDNHV IDOVH            WKDWLQ+LOODVLQ<DQFH\ZKLFKLVFLWHGLQ+LOOWKHLVVXHLV
VWDWHPHQWVDQGRPLVVLRQVWRWKHMXGJHVXFKWKDWEXWIRUWKHVH          RQH IRU WKH MXU\ RQO\ ZKHQ WKH HYLGHQFH FUHDWHV D JHQXLQH
IDOVLWLHVWKHMXGJHZRXOGQRWKDYHLVVXHGWKHZDUUDQWl,G           LVVXHRIPDWHULDOIDFWIRUWULDOl2QO\ZKHUHWKHHYLGHQFH
VHHDOVR$KOHUVY6FKHELO)GWK&LU         FUHDWHV D JHQXLQH LVVXH RI PDWHULDO IDFW VKRXOG WKH PDWWHU
+LOOY0F,QW\UH)GWK&LU                   SURFHHG WR WULDO  +HUH YLHZLQJ WKH IDFWV LQ WKH OLJKW PRVW
                                                                       IDYRUDEOH WR WKH SODLQWLII ZH ILQG WKHUH LV QR GLVSXWH RI
   $QLQYHVWLJDWRUPD\EHKHOGOLDEOHXQGHUIRUPDNLQJ          PDWHULDOIDFWDVWRWKHHYHQWVOHDGLQJXSWR9DNLOLDQjVDUUHVW
PDWHULDO IDOVH VWDWHPHQWV HLWKHU NQRZLQJO\ RU LQ UHFNOHVV
GLVUHJDUG IRU WKH WUXWK WR HVWDEOLVK SUREDEOH FDXVH IRU DQ       )RUTXDOLILHGLPPXQLW\SXUSRVHVZHDVVXPHWKDW9DNLOLDQ
DUUHVW$KOHUV  )G DW   7R RYHUFRPH DQ RIILFHUjV    KDV PDGH WKH UHTXLUHG VKRZLQJ WKDW 6KDZ UHFNOHVVO\
HQWLWOHPHQWWRTXDOLILHGLPPXQLW\KRZHYHUDSODLQWLIIPXVW           GLVUHJDUGHG WKH WUXWK ZKHQ KH WHVWLILHG EHIRUH WKH MXGJH
HVWDEOLVKDVXEVWDQWLDOVKRZLQJWKDWWKHGHIHQGDQWVWDWHG         6KDZ WROG WKH MXGJH WKDW 9DNLOLDQ RUGHUHG H[FHVVLYH WHVWV
DGHOLEHUDWHIDOVHKRRGRUVKRZHGUHFNOHVVGLVUHJDUGIRUWKH            SXUVXDQWWRDQDJUHHPHQWZLWKWKHRZQHURIWKHFOLQLFZKHQ
WUXWKDQGWKDWWKHDOOHJHGO\IDOVHRURPLWWHGLQIRUPDWLRQ          LQIDFWWKHUHZDVQRHYLGHQFHWRVXJJHVWWKDW9DNLOLDQRUGHUHG
ZDVPDWHULDOWRWKHILQGLQJRISUREDEOHFDXVH6HH+LOO          DQ\XQQHFHVVDU\WHVWRUNQHZKRZKLVERQXVZDVFRPSXWHG
)GDWDSSO\LQJWHVWVHWIRUWKLQ)UDQNVY'HODZDUH            7KXV6KDZjVWHVWLPRQ\LVIDOVHLQDVPXFKDVLWLPSOLHVWKDW
86WRHYDOXDWHDFODLPVHHDOVR            9DNLOLDQRUGHUHGWHVWVWKDWZHUHQRWPHGLFDOO\QHFHVVDU\DQG
:LOVRQY5XVVR)GG&LU+HUYH\           NQHZWKDWKLVERQXVPRQH\ZDVEDVHGRQWKHQXPEHURIWHVWV
Y(VWHV)GWK&LU3DFNHUY&LW\RI          KH RUGHUHG  7KH FRQFOXVLRQ WKDW 6KDZ PLVUHSUHVHQWHG WKH
7ROHGR1R:/DWWK&LUsDQ           HYLGHQFH WR WKH MXGJH GRHV QRW HQG RXU LQTXLU\ KRZHYHU
XQSXEOLVKHGRSLQLRQQRWLQJWKDWWKHPDWHULDOLW\RIWKH
1RV                   9DNLOLDQY6KDZHWDO                  9DNLOLDQY6KDZHWDO               1RV

EHFDXVHZHPXVWDOVRGHWHUPLQHZKHWKHUWKHIDOVHVWDWHPHQWV                      &ODLP
ZHUHPDWHULDOWRWKHILQGLQJRISUREDEOHFDXVH
                                                                           9DNLOLDQDOVRPDLQWDLQVWKDW6KDZLVOLDEOHXQGHU
    $WWKHWLPH6KDZWHVWLILHGEHIRUHWKHMXGJH0LFKLJDQODZ            IRUFRQVSLULQJWRGHSULYHKLPRIHTXDOSURWHFWLRQRIWKHODZ
GLGQRWUHTXLUHWKHJRYHUQPHQWWRSURYHWKDWDQLQGLYLGXDO               7RVWDWHDFODLPXQGHUDSODLQWLIIPXVWDOOHJHmD
FKDUJHG ZLWK 0HGLFDLG IUDXG LQWHQGHG WR UHFHLYH RU KDG           FRQVSLUDF\IRUWKHSXUSRVHRIGHSULYLQJHLWKHUGLUHFWO\RU
NQRZOHGJH RI WKH NLFNEDFN  7KH 0)&$ FRQWDLQHG QR                LQGLUHFWO\ DQ\ SHUVRQ RU FODVV RI SHUVRQV RI WKH HTXDO
HOHPHQW RI VFLHQWHU DQG KDG EHHQ LQWHUSUHWHG WR SURKLELW         SURWHFWLRQRIWKHODZVRURIHTXDOSULYLOHJHVRULPPXQLWLHVRI
UHIHUUDOIHHVRUNLFNEDFNVHYHQIRUPHGLFDOO\QHFHVVDU\WHVWV         WKH ODZV  DQ DFW LQ IXUWKHUDQFH RI WKH FRQVSLUDF\
,W ZDV QRW XQWLO WHQ PRQWKV DIWHU 9DNLOLDQjV DUUHVW WKDW WKH    ZKHUHE\ D SHUVRQ LV HLWKHU LQMXUHG LQ KLV SHUVRQ RU
0LFKLJDQ&RXUWRI$SSHDOVUXOHGWKDWDVKRZLQJRIJHQHUDO                SURSHUW\RUGHSULYHGRIDQ\ULJKWRUSULYLOHJHRIDFLWL]HQRI
LQWHQWZDVUHTXLUHGXQGHUWKHVWDWXWH6HH3HRSOHY0RWRU              WKH8QLWHG6WDWHVl8QLWHG%KGRI&	sY6FRWW86
&LW\ +RVS DQG 6XUJLFDO 6XSSO\  1:G                  7KH DFWV ZKLFK DUH DOOHJHG WR KDYH
0LFK $SS   7KXV WKHUH ZDV QR UHTXLUHPHQW WKDW         GHSULYHGWKHSODLQWLIIRIHTXDOSURWHFWLRQPXVWEHWKHUHVXOWRI
6KDZ RIIHU SURRI RI NQRZOHGJH RU XQQHFHVVDU\ WHVWLQJ LQ          FODVVEDVHGGLVFULPLQDWLRQ6HH1HZHOOY%URZQ)G
RUGHUWRHVWDEOLVKSUREDEOHFDXVH                                       WK&LU
   7KHUHPDLQLQJTXHVWLRQLVZKHWKHUWKHDFFXUDWHSRUWLRQVRI               2QDSSHDO6KDZDUJXHVWKDW9DNLOLDQKDVIDLOHGWRSXWIRUWK
6KDZjV WHVWLPRQ\ VXIILFH WR HVWDEOLVK SUREDEOH FDXVH  ,Q        VXIILFLHQW HYLGHQFH WR VXSSRUW D IDFWXDO ILQGLQJ WKDW D
DGGLWLRQWRWKHIDOVHVWDWHPHQWV6KDZWHVWLILHGWKDW9DNLOLDQ           FRQVSLUDF\ H[LVWHG DQG WKDW KH ZDV PRWLYDWHG E\
mUHFHLYHGDGGLWLRQDOPRQH\DERYHZKDWKHLVVXSSRVHGWRJHWl             GLVFULPLQDWRU\ DQLPXV  %HFDXVH WKLV LV DQ LQWHUORFXWRU\
DQGWKDWmUHFRUGVZHUHNHSWHDFKPRQWKRQWKHDPRXQWRIWHVWV            DSSHDO EDVHG RQ TXDOLILHG LPPXQLW\ ZH FDQQRW FRQVLGHU
WKDWWKH\>WKHGRFWRUV@ZHUHSHUIRUPLQJDQGDVHSDUDWHFKHFN             ZKHWKHU9DNLOLDQjVHYLGHQFHLVVXIILFLHQWWRSUHVHQWDJHQXLQH
ZDVZULWWHQWRWKHVHGRFWRUVIRUWKHVHVHUYLFHVl,QGHHGWKH           LVVXH IRU WULDO DV WR WKH XQGHUO\LQJ IDFWXDO HOHPHQWV RI KLV
HYLGHQFHHVWDEOLVKHGWKDW9DNLOLDQUHFHLYHGDERQXVEDVHGRQ             FODLP2XUMXULVGLFWLRQLVOLPLWHGWRSXUHO\OHJDOTXHVWLRQV
WKHQXPEHURIWHVWVKHRUGHUHGDQGWKHWDVNIRUFHGLVFRYHUHG             DQGWKHUHIRUHZHODFNMXULVGLFWLRQWRUHYLHZDGLVWULFWFRXUWjV
D ZLGHUDQJLQJ VFKHPH WR FRYHU XS WKH LOOHJDO NLFNEDFNV         ILQGLQJ WKDW 9DNLOLDQ KDV SUHVHQWHG VXIILFLHQW HYLGHQFH WR
7KLVWHVWLPRQ\ZKLOHLQVXIILFLHQWWREULQJFKDUJHVXQGHUWKH            SURFHHGWRGLVFRYHU\ 6HH)DUP/DERU2UJ&RPPY2KLR
FXUUHQWLQWHUSUHWDWLRQRIWKHVWDWXWHZDVVXIILFLHQWWRHVWDEOLVK       6WDWH+LJKZD\3DWURO)GWK&LU
SUREDEOH FDXVH DW WKH WLPH FKDUJHV ZHUH ILOHG DJDLQVW            FLWLQJsRKQVRQ86DW
9DNLOLDQ
                                                                            )RUSXUSRVHVRITXDOLILHGLPPXQLW\DQDO\VLVWKHUHLVOLWWOH
  ,QVXPPDU\WKHGLVWULFWFRXUWHUUHGLQKROGLQJWKDWWKHUH             GRXEWWKDWWKUHHRIWKHIRXUHOHPHQWVDUHVDWLVILHG9DNLOLDQ
ZHUHJHQXLQHLVVXHVRIPDWHULDOIDFWRQWKH%HFDXVH             DOOHJHVWKDW6KDZDQG.RHQLJVNQHFKWDVPHPEHUVRIWKHWDVN
6KDZjV UHPDLQLQJ WHVWLPRQ\ ZDV VXIILFLHQW WR HVWDEOLVK             IRUFH DFWHG LQ FRQFHUW WR YLRODWH KLV FRQVWLWXWLRQDO ULJKWV
SUREDEOH FDXVH WKH MXGJH ZRXOG KDYH LVVXHG WKH ZDUUDQW          DFFRUGLQJWRDQDJUHHGXSRQSODQ7KHFRPSODLQWDOVRVHWV
ZKHWKHU RU QRW WKHUH KDG EHHQ IDOVH WHVWLPRQ\  7KHUHIRUH
6KDZ LV HQWLWOHG WR TXDOLILHG LPPXQLW\ RQ WKH )RXUWK
$PHQGPHQW FODLPV RI XQODZIXO DUUHVW DQG PDOLFLRXV                       
                                                                              :KLOH ZH GHFOLQH WR DGGUHVV WKH VXIILFLHQF\ RI 9DNLOLDQjV HYLGHQFH
SURVHFXWLRQ                                                             ZH QRWH WKDW 6KDZ PD\ PDNH WKLV FKDOOHQJH EHIRUH WKH GLVWULFW FRXUW RQ
                                                                         UHPDQG
1RV                  9DNLOLDQY6KDZHWDO               9DNLOLDQY6KDZHWDO                1RV

IRUWK VHYHUDO DFWV WDNHQ LQ IXUWKHUDQFH RI WKH FRQVSLUDF\         1RWZLWKVWDQGLQJWKLVFRQFOXVLRQ6KDZQHYHUWKHOHVVDVVHUWV
LQFOXGLQJ6KDZjVDQG.RHQLJVNQHFKWjVIDLOXUHWRLQWHUYLHZ               WKDWVXPPDU\MXGJPHQWLVDSSURSULDWHLQOLJKWRIKLVDIILGDYLW
9DNLOLDQ GXULQJ WKHLU LQYHVWLJDWLRQ DQG WKHLU GHFLVLRQ WR        LQ VXSSRUW RI KLV PRWLRQ WR GLVPLVV DQG IRU VXPPDU\
H[HFXWHDFULPLQDOFRPSODLQWDQGZDUUDQWDJDLQVW9DNLOLDQ              MXGJPHQW  %RWK 6KDZ DQG .RHQLJVNQHFKW VXEPLWWHG
7KHVHDFWVDFFRUGLQJWR9DNLOLDQGHSULYHGKLPRIKLVULJKWV          DIILGDYLWV VWDWLQJ WKDW 9DNLOLDQjV HWKQLFLW\ ZDV QRW D
SULYLOHJHVDQGLPPXQLWLHVXQGHUWKH&RQVWLWXWLRQEHFDXVHWKH           FRQVLGHUDWLRQLQWKHGHFLVLRQWRLQYHVWLJDWHRUEULQJFKDUJHV
GHFLVLRQWRFKDUJHKLPDIRUHLJQERUQDQGHWKQLFPLQRULW\              DJDLQVWKLP6KDZjVDIILGDYLWDOVRH[SODLQVWKDWKHWHVWLILHG
GRFWRUZKLOHIDLOLQJWRFKDUJH$PHULFDQERUQ$QJORGRFWRUV            WUXWKIXOO\GXULQJWKHSUHOLPLQDU\H[DPWKDWKHZDVXQDZDUH
GHSULYHGKLPRIKLVULJKWWRHTXDOSURWHFWLRQRIWKHODZV              RIWKHHWKQLFEDFNJURXQGRIWKHFULPLQDOGHIHQGDQWV9DNLOLDQ
                                                                        GLG QRW VXEPLW DGGLWLRQDO HYLGHQFH FRQWURYHUWLQJ 6KDZjV
  7KH FULWLFDO LVVXH LV ZKHWKHU 9DNLOLDQ FDQ HVWDEOLVK WKDW     VWDWHPHQWVWKDWKHODFNHGGLVFULPLQDWRU\DQLPXV
6KDZjV DFWLRQ ZDV PRWLYHG E\ mVRPH UDFLDO RU SHUKDSV
RWKHUZLVH FODVVEDVHG LQYLGLRXVO\ GLVFULPLQDWRU\ DQLPXVl             :KLOHDQXQFRQWURYHUWHGDIILGDYLWIUHTXHQWO\HVWDEOLVKHVWKH
*ULIILQ Y %UHFNHQULGJH  86     6KDZ        DEVHQFH RI D JHQXLQH LVVXH IRU WULDO WKH PHUH IDFW WKDW
FRQWHQGVWKDW9DNLOLDQKDVIDLOHGWRPDNHRXWDYLRODWLRQRI            mDIILGDYLWVILOHGLQVXSSRUWRIDPRWLRQIRUVXPPDU\MXGJPHQW
FOHDUO\HVWDEOLVKHGODZEHFDXVHWKHGHIHQGDQWVLQWKHFULPLQDO          DUH QRW FRQWURYHUWHG GRHV QRW QHFHVVDULO\ UHTXLUH LWV EHLQJ
DFWLRQ GR QRW VKDUH D FRPPRQ FKDUDFWHULVWLF WKDW FUHDWHV D     JUDQWHGl)LW]NHY6KDSSHOO)GWK
VLQJOHmFODVVl7KHGHIHQGDQWVLQWKHFULPLQDOPDWWHUZHUHQRW         &LUm:KHUHWKHHYLGHQWLDU\PDWWHULQVXSSRUWRIWKH
RI WKH VDPH HWKQLFLW\ QRU ZHUH DOO RI WKHP IRUHLJQWUDLQHG     PRWLRQ GRHV QRW HVWDEOLVK WKH DEVHQFH RI D JHQXLQH LVVXH
SK\VLFLDQV                                                             VXPPDU\ MXGJPHQW PXVW EH GHQLHG HYHQ LI QR RSSRVLQJ
                                                                        HYLGHQWLDU\ PDWWHU LV SUHVHQWHGl  )HG 5 &LY 3 H
   $OWKRXJK m>D@ FODVV SURWHFWHG E\ VHFWLRQ  PXVW         $GYLVRU\&RPPLWWHH1RWHV$PHQGPHQW7KHUHIRUH
SRVVHVVWKHFKDUDFWHULVWLFVRIDGLVFUHWHDQGLQVXODUPLQRULW\         WRVDWLVI\KLVmEXUGHQRIVKRZLQJWKHDEVHQFHRIDQ\JHQXLQH
VXFKDVUDFHQDWLRQDORULJLQRUJHQGHUl+DYHUVWLFN(QWHUV         LVVXH DV WR DOO RI WKH PDWHULDO IDFWVl 6KDZ mPXVW PDNH D
,QF Y )LQ )HG &UHGLW ,QF  )G   WK &LU   VKRZLQJWKDWLVTXLWHFOHDUZKDWWKHWUXWKLVDQGWKDWH[FOXGHV
WKHODZGRHVQRWUHTXLUHDSODLQWLIIWRVKRZWKDWKHRU          DQ\ UHDO GRXEW DV WR WKH H[LVWHQFH RI DQ\ JHQXLQH LVVXH RI
VKHLVDPHPEHURIWKHVDPHSURWHFWHGFODVVDVRWKHUVZKR               PDWHULDOIDFWl)LW]NH)GDWQ
PD\ EH LQ D SRVLWLRQ LQGHSHQGHQWO\ WR DOOHJH D  
YLRODWLRQ7KXV9DNLOLDQQHHGQRWDOOHJHWKDWKHDQGWKHRWKHU          6HFWLRQGHIHQGDQWVFDQQRWHVWDEOLVKWKHDEVHQFHRID
FULPLQDOGHIHQGDQWVVKDUHDFRPPRQKHULWDJH,WLVVXIILFLHQW          JHQXLQH LVVXH RI PDWHULDO IDFW VLPSO\ E\ GLVDYRZLQJ DQ\
WKDW 9DNLOLDQ HVWDEOLVKHV IDFWV WHQGLQJ WR VKRZ WKDW 6KDZ       NQRZOHGJHRIWKHGLVFULPLQDWRU\FKDUDFWHULVWLFDWLVVXH,Q
SRVVHVVHG GLVFULPLQDWRU\ LQWHQW DQG WKDW KH SURVHFXWHG            5HHVHY&LW\RI6RXWKILHOG1R:/DW
9DNLOLDQEXWQRWDVLPLODUO\VLWXDWHGZKLWHSK\VLFLDQ6HH             WK &LU $XJ   ZH HPSOR\HG WKH 0F'RQQHOO
HJ)DUP/DERU2UJ&RPP)GDWm$FODLPDQW               'RXJODVEXUGHQVKLIWLQJIUDPHZRUNLQWKHFRQWH[WRID
FDQGHPRQVWUDWHGLVFULPLQDWRU\HIIHFWE\QDPLQJDVLPLODUO\             FODLPDOOHJLQJGLVFULPLQDWLRQ1RWLQJWKDWWKH6XSUHPH&RXUW
VLWXDWHGLQGLYLGXDOZKRZDVQRWLQYHVWLJDWHGRUWKURXJKWKH             DSSOLHV WKLV EXUGHQ VKLIWLQJ DQDO\VLV WR HPSOR\PHQW
XVH RI VWDWLVWLFDO RU RWKHU HYLGHQFH ZKLFK µDGGUHVV>HV@ WKH     GLVFULPLQDWLRQODZVXLWVEURXJKWXQGHU86&WKLV
FUXFLDO TXHVWLRQ RI ZKHWKHU RQH FODVV LV EHLQJ WUHDWHG          FRXUWUHDVRQHGWKDWWKHVFKHPHVKRXOGDOVRDSSO\WR
GLIIHUHQWO\ IURP DQRWKHU FODVV WKDW LV RWKHUZLVH VLPLODUO\       VXLWVIRUGLVFULPLQDWLRQRXWVLGHWKHHPSOR\PHQWFRQWH[W
VLWXDWHGlFLWDWLRQRPLWWHG
1RV                      9DNLOLDQY6KDZHWDO                 9DNLOLDQY6KDZHWDO               1RV

  0F'RQQHOO'RXJODVDQGLWVSURJHQ\UHIOHFWWKHIDFWWKDW                       $WWKHWLPHRI9DNLOLDQjVDUUHVWWKLVFLUFXLWUHFRJQL]HGWKDW
  GLUHFW HYLGHQFH LV RIWHQ XQDYDLODEOH LQ GLVFULPLQDWLRQ                mWKHHQIRUFHPHQWRIDQRWKHUZLVHYDOLGODZFDQEHDPHDQVRI
  FDVHV>$@GLVFULPLQDWLRQSODLQWLIIFDQQRWQHFHVVDULO\                YLRODWLQJFRQVWLWXWLRQDOULJKWVE\LQYLGLRXVGLVFULPLQDWLRQl
  RIIHU GLUHFW WHVWLPRQ\ WKDW KLV UHMHFWLRQ GHPRWLRQ                  )XWHUQLFNY6XPSWHU7RZQVKLS)GWK&LU
  WHUPLQDWLRQ RU GHQLDO ZDV GXH WR XQODZIXO                            VHH DOVR 6WHPOHU  )G DW  8QLWHG 6WDWHV Y
  GLVFULPLQDWLRQ  0F'RQQHOO 'RXJODV WKXV VHUYHV D                      $QGHUVRQ)GWK&LU 0RUHRYHUDQ
  GLVFRYHU\OLNH IXQFWLRQ  DV ORQJ DV D SODLQWLII FDQ                RIILFHUjVUHDVRQDEOHEHOLHIWKDWSUREDEOHFDXVHH[LVWVIRUDUUHVW
  HVWDEOLVKDSULPDIDFLHFDVHWKHGHIHQGDQWLVUHTXLUHG                GRHV QRW DIIHFW WKH DYDLODELOLW\ RI D VHSDUDWH VHOHFWLYH
  WRSURYHDQH[SODQDWLRQRILWVDFWLRQV                                 HQIRUFHPHQW FODLP XQGHU WKH (TXDO 3URWHFWLRQ &ODXVH
                                                                              6WHPOHU)GQRWLQJWKDWLQ:KUHQY8QLWHG6WDWHV
,GVHHDOVR0LWFKHOOY7ROHGR+RVS)GWK                 86   WKH 6XSUHPH &RXUW FRQILUPHG WKH
&LUH[SODLQLQJWKDWWKH0F'RQQHOO'RXJODVIRUPXOD                     DYDLODELOLW\RIDQHTXDOSURWHFWLRQFODLPGHVSLWHWKHH[LVWHQFH
DUWLFXODWHV WKH HYLGHQWLDU\ IUDPHZRUN IRU GLVFULPLQDWLRQ                 RISUREDEOHFDXVH7KXVLWVHHPVFOHDUWRXVWKDWDWWKHWLPH
FODLPVEURXJKWXQGHU$VDFRQVHTXHQFH6KDZPXVW                    6KDZ VZRUH RXW WKH DUUHVW ZDUUDQWV VHOHFWLYH HQIRUFHPHQW
GRPRUHWKDQGHQ\DQ\GLVFULPLQDWRU\DQLPXVRQKLVSDUW                     EHFDXVHRIUDFHHWKQLFLW\QDWLRQDOLW\RUUHOLJLRQZDVJURXQGV
                                                                              IRUUHOLHI
   +DYLQJ GHWHUPLQHG WKDW WKH IDFWV DOOHJHG LQ 9DNLOLDQjV
FRPSODLQW ZRXOG LI SURYHQ HVWDEOLVK DQ HTXDO SURWHFWLRQ                $OWKRXJKLQYHVWLJDWRUVKDYHFRQVLGHUDEOHGLVFUHWLRQDVWR
YLRODWLRQ ZH PXVW QRZ DVN ZKHWKHU WKH ULJKW ZDV FOHDUO\             KRZ WKH\ FRQGXFW LQYHVWLJDWLRQV DQG HQIRUFH WKH ODZ D
HVWDEOLVKHGDWWKHWLPHRI6KDZjVDFWLRQ,QGHFLGLQJZKHWKHU                UHDVRQDEOHRIILFHULQ6KDZjVSRVLWLRQZRXOGKDYHUHFRJQL]HG
DULJKWZDVFOHDUO\HVWDEOLVKHGDFRXUWVKRXOGFRQVLGHUmWKH                 WKDWVHOHFWLYHHQIRUFHPHQWRQWKHEDVLVRIDVXVSHFWjVUDFHRU
VSHFLILFFRQWH[WRIWKHFDVHlQRWZKHWKHUWKHULJKWZDVFOHDUO\              HWKQLFLW\ LV XQFRQVWLWXWLRQDO  $FFRUGLQJ WR 9DNLOLDQjV
HVWDEOLVKHGmDVDEURDGJHQHUDOSURSRVLWLRQl6DXFLHU                   FRPSODLQW 6KDZ KDG UHDVRQ WR VXVSHFW WKDW DOO VHYHQWHHQ
86 DW   m>7@KH UHOHYDQW GLVSRVLWLYH LQTXLU\ LQ                 SK\VLFLDQV ZKR ZRUNHG DW +HDOWK 6WRS FOLQLFV PLJKW KDYH
GHWHUPLQLQJZKHWKHUDULJKWLVFOHDUO\HVWDEOLVKHGLVZKHWKHU                 EHHQLQYROYHGLQWKHLOOHJDOVFKHPHWRVRPHGHJUHH,IDV
LWZRXOGEHFOHDUWRDUHDVRQDEOHRIILFHUWKDWWKHFRQGXFWZDV                9DNLOLDQDOOHJHG6KDZKDGFRPSDUDEOHHYLGHQFHDJDLQVWIRXU
XQODZIXOLQWKHVLWXDWLRQKHFRQIURQWHGl,GFLWLQJ:LOVRQ                SK\VLFLDQV9DNLOLDQ DQ ,UDQLDQERUQ SK\VLFLDQ DQG WKUHH
Y/D\QH86                                         $QJOR$PHULFDQSK\VLFLDQVDQGGHFLGHGWRFKDUJHKLPDQG
                                                                              QRWWRFKDUJHWKH$QJOR$PHULFDQVEHFDXVHRIWKHLUUHVSHFWLYH
                                                                              UDFHVRUHWKQLFLW\VXUHO\WKHFLUFXPVWDQFHVZHUHVXFKWKDWD
                                                                             UHDVRQDEOHRIILFHULQ6KDZjVSRVLWLRQZRXOGUHFRJQL]HWKDW
      7KH UHFRUG GRHV UHIOHFW WKDW 6KDZ DGYDQFHG D QRQGLVFULPLQDWRU\
UHDVRQ IRU SURVHFXWLQJ 9DNLOLDQ EXW QRW WKH $QJOR SK\VLFLDQV 6KDZjV
                                                                              WKLVVHOHFWLYHHQIRUFHPHQWRIWKHODZZDVXQFRQVWLWXWLRQDO
WHVWLPRQ\ VXJJHVWV WKDW KH EHOLHYHG WKDW VRPH RI WKH $PHULFDQERUQ            7KHUHIRUH6KDZLVQRWHQWLWOHGWRTXDOLILHGLPPXQLW\ZLWK
SK\VLFLDQV VKRXOG KDYH EHHQ FKDUJHG LQDVPXFK DV WKH\ ZHUH NQRZQ WR            UHVSHFWWR9DNLOLDQjVFODLP
KDYH SDUWLFLSDWHG LQ WKH IUDXGXOHQW VFKHPH EXW WKDW WKHVH LQGLYLGXDOV ZHUH
QRW XOWLPDWHO\ FKDUJHG EHFDXVH WKH VWDWXWH RI OLPLWDWLRQV KDG UXQ ,Q         & 3HQGHQWsXULVGLFWLRQ
UHVSRQVH 9DNLOLDQ DUJXHV WKDW WKLV UHDVRQ LV SUHWH[W FLWLQJ WKH IDFW WKDW
RQH RI WKH $QJOR SK\VLFLDQV DGPLWWHG WR UHFHLYLQJ D ERQXV FKHFN GXULQJ
WKH VWDWXWH RI OLPLWDWLRQV SHULRG $JDLQ EHFDXVH WKLV FDVH LV EHIRUH XV RQ
                                                                                ,QKLVFURVVDSSHDO9DNLOLDQUHTXHVWVWKDWZHH[HUFLVHRXU
LQWHUORFXWRU\ DSSHDO ZH PXVW YLHZ WKH IDFWV LQ WKH OLJKW PRVW IDYRUDEOH WR
                                                                              SHQGHQWDSSHOODWHMXULVGLFWLRQWRUHYHUVHWKHGLVWULFWFRXUWjV
WKH SODLQWLII    7KHUHIRUH ZH PXVW DVVXPH IRU TXDOLILHG LPPXQLW\           RUGHUJUDQWLQJVXPPDU\MXGJPHQWLQIDYRURI.RHQLJVNQHFKW
SXUSRVHV RQO\ WKDW 9DNLOLDQ KDV HVWDEOLVKHG D FRQVWLWXWLRQDO YLRODWLRQ
1RV                 9DNLOLDQY6KDZHWDO              9DNLOLDQY6KDZHWDO                1RV

,QRUGHUWRH[HUFLVHSHQGHQWMXULVGLFWLRQRYHUDQLVVXHWKDWLV       FULPLQDOSURFHVV2XUDQDO\VLVDGGUHVVHVRQO\ZKHWKHUWKH
QRWLQGHSHQGHQWO\DSSHDODEOHWKHLVVXHPXVWEHmLQH[WULFDEO\         IDFWVZKHQYLHZHGLQWKHOLJKWPRVWIDYRUDEOHWR9DNLOLDQ
LQWHUWZLQHGlZLWKWKHLVVXHRITXDOLILHGLPPXQLW\%UHQQDQ           HVWDEOLVK D YLRODWLRQ RI D FOHDUO\ HVWDEOLVKHG ULJKW  7KXV
Y7RZQVKLSRI1RUWKYLOOH)GWK&LU         EHFDXVHDQHTXDOSURWHFWLRQYLRODWLRQPD\YHU\ZHOOH[LVWDQG
LQWHUSUHWLQJGLFWXPLQ6ZLQWY&KDPEHUV&RXQW\&RPPjQ              RXUUHVROXWLRQRIWKHDSSHDODEOHLVVXHKDVQREHDULQJRQWKH
 86   mDV DOORZLQJ SHQGHQW DSSHOODWH             TXHVWLRQRIDEVROXWHLPPXQLW\6KDZjVDSSHDOLQWKLVFDVHLV
MXULVGLFWLRQZKHUHWKHDSSHDODEOHDQGQRQDSSHDODEOHLVVXHV           QRWmLQH[WULFDEO\LQWHUWZLQHGlZLWKWKHHTXDOSURWHFWLRQFODLP
DUHµLQH[WULFDEO\LQWHUWZLQHGjl7KLVFLUFXLWKDVLQWHUSUHWHG      DJDLQVW.RHQLJVNQHFKW$FFRUGLQJO\ZHGHFOLQHWRUHYLHZ
mLQH[WULFDEO\LQWHUWZLQHGlWRPHDQWKDWWKHUHVROXWLRQRIWKH         WKH GLVWULFW FRXUWjV GHFLVLRQ WR JUDQW VXPPDU\ MXGJPHQW WR
DSSHDODEOHLVVXHmQHFHVVDULO\DQGXQDYRLGDEO\lGHFLGHVWKH            .RHQLJVNQHFKWRQWKLVFODLP
QRQDSSHDODEOHLVVXH,G
                                                                                              &21&/86,21
  7KH UHVROXWLRQ RI WKH )RXUWK $PHQGPHQW FODLP DJDLQVW
6KDZ SHUPLWV XV WR H[HUFLVH RXU GLVFUHWLRQ WR UHYLHZ WKH       )RU WKH UHDVRQV VWDWHG DERYH ZH $)),50 WKH GLVWULFW
GLVWULFWFRXUWjVGHWHUPLQDWLRQRI.RHQLJVNQHFKWjVOLDELOLW\RQ        FRXUWjVGHQLDORIDEVROXWHLPPXQLW\WR6KDZLQKLVLQGLYLGXDO
WKLVLVVXH9DNLOLDQDOOHJHGWKDWERWKGHIHQGDQWVFRQVSLUHGWR       FDSDFLW\:HDOVR5(9(56(WKHGLVWULFWFRXUWjVGHQLDORI
YLRODWH KLV )RXUWK $PHQGPHQW ULJKWV  2XU ILQGLQJ WKDW        TXDOLILHG LPPXQLW\ RQ WKH )RXUWK $PHQGPHQW FODLP DQG
SUREDEOH FDXVH H[LVWHG IRU 9DNLOLDQjV DUUHVW KRZHYHU          $)),50 WKH GLVWULFW FRXUWjV GHQLDO RI TXDOLILHG LPPXQLW\
SUHFOXGHV XV IURP ILQGLQJ WKDW .RHQLJVNQHFKWjV DOOHJHG          ZLWKUHVSHFWWRWKHFODLPDQG5(0$1'WKLVFDVHIRU
DFWLRQVDVDSURVHFXWRUDPRXQWHGWRDFRQVWLWXWLRQDOYLRODWLRQ       IXUWKHU SURFHHGLQJV  :LWK UHVSHFW WR WKH FODLPV DJDLQVW
6HHLGH[HUFLVLQJSHQGHQWMXULVGLFWLRQWRUHYHUVHVXPPDU\           .RHQLJVNQHFKW ZH FKRRVH WR H[HUFLVH RXU GLVFUHWLRQ WR
MXGJPHQW LQ IDYRU RI WKH SODLQWLII RQ KLV FODLP ZKHUH ZH    $)),50 WKH JUDQW RI VXPPDU\ MXGJPHQW RQ WKH )RXUWK
IRXQGQRFRQVWLWXWLRQDOYLRODWLRQLQRXUTXDOLILHGLPPXQLW\           $PHQGPHQWFODLPEXWGHFOLQHWRH[HUFLVHSHQGHQWDSSHOODWH
DQDO\VLVVHHDOVR0DWWR[Y&LW\RI)RUHVW3DUN)G           MXULVGLFWLRQWRUHYLHZWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\
WK&LUILQGLQJLWDSSURSULDWHWRUHVROYH        MXGJPHQWWR.RHQLJVNQHFKWRQWKHFODLP
DSHQGHQWFODLPDJDLQVWWKHFLW\JRYHUQPHQWZKHUHWKHUHKDG
EHHQQRFRQVWLWXWLRQDOYLRODWLRQE\FLW\RIILFLDOV,QRWKHU
ZRUGV WKH GHWHUPLQDWLRQ WKDW QR FRQVWLWXWLRQDO YLRODWLRQ
RFFXUUHG QHFHVVDULO\ DQG XQDYRLGDEO\ UHVROYHV 9DNLOLDQjV
)RXUWK $PHQGPHQW FODLP DJDLQVW .RHQLJVNQHFKW  :H
WKHUHIRUH DIILUP WKDW JUDQW RI VXPPDU\ MXGJPHQW WR
.RHQLJVNQHFKWRQWKLVFODLP
   +RZHYHUKDYLQJFRQFOXGHGWKDW9DNLOLDQjVDOOHJDWLRQVLI
SURYHQ WUXH FRQVWLWXWH D YLRODWLRQ RI KLV HTXDO SURWHFWLRQ
ULJKWV ZH FDQQRW H[HUFLVH SHQGHQW MXULVGLFWLRQ RYHU WKH
FODLPDJDLQVW.RHQLJVNQHFKW7KHGLVWULFWFRXUW
JUDQWHG VXPPDU\ MXGJPHQW LQ IDYRU RI .RHQLJVNQHFKW
ILQGLQJWKDWKHZDVHQWLWOHGWRDEVROXWHLPPXQLW\EHFDXVHKLV
DFWVZHUHLQWLPDWHO\ERXQGXSZLWKWKHMXGLFLDOSKDVHRIWKH
