           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


 '2527+< 0$&.(<                 ;
         3ODLQWLII$SSHOODQW     
                                  
                                     1R
           Y                     
                                   !
                                  
 81,7(' 67$7(6 2) $0(5,&$ 
         'HIHQGDQW$SSHOOHH 
                                 1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
      IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW'D\WRQ
     1Rn6XVDQs'ORWW'LVWULFWsXGJH
                     $UJXHG$XJXVW
            'HFLGHGDQG)LOHG6HSWHPEHU
 %HIRUH1(/621DQG1255,6&LUFXLWsXGJHV0$7,$
                   'LVWULFWsXGJH
                       BBBBBBBBBBBBBBBBB
                             &2816(/
$5*8('  sRDQQH sRFKD (UYLQ 'D\WRQ 2KLR IRU
$SSHOODQW  5REHUW ' .DPHQVKLQH 81,7(' 67$7(6
'(3$570(17 2) s867,&( &,9,/ ',9,6,21

    
     7KH +RQRUDEOH 3DXO 5 0DWLD 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH
1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ



                                   
     0DFNH\Y8QLWHG6WDWHV                           1R        1R                       0DFNH\Y8QLWHG6WDWHV         

$33(//$7( 67$)) :DVKLQJWRQ '& IRU $SSHOOHH                      SUHSDUHGWRFRQYLQFHDFLYLOLDQFRXUWRIWKHZLVGRPRIDZLGH
21 %5,()  sRDQQH sRFKD (UYLQ 'D\WRQ 2KLR IRU                   UDQJHRIPLOLWDU\DQGGLVFLSOLQDU\GHFLVLRQV6HHLG,QWKH
$SSHOODQW  'DQLHO / .DSODQ 81,7(' 67$7(6                          SUHVHQWFDVHWKHVDPHVRUWRIWHVWLPRQ\ZRXOGEHUHTXLUHG
'(3$570(17 2) s867,&( &,9,/ ',9,6,21                                 6HHDOVR0DMRUY8QLWHG6WDWHV)GWK&LU
$33(//$7(67$)):DVKLQJWRQ'&IRU$SSHOOHH                          DSSO\LQJ)HUHVGRFWULQHWRFODLPVWKDWPLOLWDU\RIILFHUV
                                                                           IDLOHGWRIROORZUHJXODWLRQVSURKLELWLQJRQEDVHFRQVXPSWLRQ
                       BBBBBBBBBBBBBBBBB                                   RIDOFRKROEHFDXVHDFKDOOHQJHWRWKHRIILFHUVjDFWLRQVZRXOG
                                                                           UHTXLUH WKHP WR WHVWLI\ DERXW PLOLWDU\ GHFLVLRQV UHODWLQJ WR
                           23,1,21                                         DOFRKRORQEDVHDVZHOODVGLVFLSOLQDU\SROLFLHVIRULQIUDFWLRQV
                       BBBBBBBBBBBBBBBBB                                   RIUXOHV
  $/$1(1255,6&LUFXLWsXGJH7KLVDSSHDOFRPHVWRXV                    0DFNH\DOVRPDLQWDLQVWKDWDQ\SRWHQWLDOKDUPWRPLOLWDU\
IRUWKHVHFRQGWLPH,QWKLVFRXUWUHYHUVHGDQRUGHURI             GLVFLSOLQH FDQQRW RYHUFRPH WKH DFWXDO KDUP WR WKH SXEOLF
WKHGLVWULFWFRXUWKROGLQJWKDWWKHLQGLYLGXDOGHIHQGDQWVQDPHG            LQWHUHVWRIGHQ\LQJKHUDUHPHG\IRUWKHFRQGXFWDOOHJHGLQ
LQ WKH FRPSODLQW ZHUH QRW DFWLQJ ZLWKLQ WKH VFRSH RI WKHLU       WKLV FDVH  7KH JRYHUQPHQW FRXQWHUV E\ SRLQWLQJ RXW WKDW
HPSOR\PHQW2QUHPDQGWKHGLVWULFWFRXUWHQWHUHGDQRUGHU                DSSOLFDWLRQRIWKHLPPXQLW\GRFWULQHQHLWKHUPLQLPL]HVWKH
VXEVWLWXWLQJWKH8QLWHG6WDWHVDVGHIHQGDQWDQGGLVPLVVLQJWKH             VHULRXVQHVVRIWKHDOOHJHGVH[XDOPLVFRQGXFWQRUFRPSOHWHO\
FDVHSXUVXDQWWRWKH)HUHVGRFWULQHZKLFKEDUVFODLPVXQGHU               GHSULYHV0DFNH\RIDUHPHG\LQOLJKWRIWKHDYDLODELOLW\RI
WKH)HGHUDO7RUW&ODLPV$FWm)7&$lIRULQMXULHVWKDWDULVH               GLVFLSOLQHWKURXJKWKH8QLIRUP&RGHRI0LOLWDU\sXVWLFH
LQFLGHQWWRPLOLWDU\VHUYLFH6HH)HUHVY8QLWHG6WDWHV             86&HWVHTDQGWKHH[LVWHQFHRIEHQHILWVSURJUDPV
86                                                           DYDLODEOHWRLQMXUHGVHUYLFHPHPEHUV6HH6PLWKY8QLWHG
                                                                           6WDWHV)GWK&LUFHUWGHQLHG6
  2Q DSSHDO SODLQWLII 'RURWK\ 0DFNH\ PDLQWDLQV WKDW WKH            &W    7KH ORJLF RI 0DFNH\jV DUJXPHQW LV DOVR
)HUHVGRFWULQHGRHVQRWDSSO\WRFODLPVLQYROYLQJLQWHQWLRQDO              XQGHUPLQHGE\)HUHVSURJHQ\LQJHQHUDO6HHHJ6KHDUHU
WRUWV6KHDOVRDUJXHVWKDWHYHQLIWKHGRFWULQHLVJHQHUDOO\            86DWLPSO\LQJWKDWLQWHUHVWLQPLOLWDU\GLVFLSOLQH
DSSOLFDEOHWRVXFKFODLPVLWGRHVQRWDSSO\WRWKLVFDVH               RYHUFRPHV SXEOLF LQWHUHVW LQ SUHYHQWLQJ NLGQDSLQJ DQG
                                                                           PXUGHUV
                                  ,
                                                                             )LQDOO\ 0DFNH\ DSSHDUV WR DUJXH WKDW )HUHV VKRXOG EH
   7KHFLUFXPVWDQFHVJLYLQJULVHWRWKLVFDVHDUHIXOO\VHWIRUWK          RYHUUXOHG  :KLOH WKHUH DUH PDQ\ DUJXPHQWV DYDLODEOH WR
LQRXUHDUOLHURSLQLRQDQGZHZLOOQRWUHVWDWHWKHPLQGHWDLO              FULWLFL]HWKH)HUHVGRFWULQHVHHHJsRKQVRQ86DW
KHUH6HH0DFNH\Y0LODP)GWK&LU                  6FDOLD s GLVVHQWLQJ WKLV FRXUW FDQQRW RYHUUXOH
FHUWGHQLHG6&W%ULHIO\0DFNH\              6XSUHPH&RXUWSUHFHGHQW6HH+XWWRY'DYLV86
ILOHG VXLW LQ VWDWH FRXUW DJDLQVW KHU VXSHULRU RIILFHUV LQ WKH   
8QLWHG6WDWHV$LU)RUFHDOOHJLQJVH[XDOKDUDVVPHQW:KHQ
WKH86$WWRUQH\FHUWLILHGWKDWWKHRIILFHUVZHUHDFWLQJZLWKLQ                                          ,,,
WKH VFRSH RI WKHLU HPSOR\PHQW WKH FDVH ZDV UHPRYHG WR
IHGHUDO FRXUW DQG WKH 8QLWHG 6WDWHV ZDV VXEVWLWXWHG DV                )RUWKHIRUHJRLQJUHDVRQVWKHMXGJPHQWRIWKHGLVWULFWFRXUW
GHIHQGDQW  7KH GLVWULFW FRXUW GHWHUPLQHG WKDW WKH RIILFHUV        LV$)),50('
ZHUH QRW DFWLQJ ZLWKLQ WKH VFRSH RI WKHLU HPSOR\PHQW EXW
FHUWLILHGWKDWGHFLVLRQIRULQWHUORFXWRU\DSSHDO:HUHYHUVHG
     0DFNH\Y8QLWHG6WDWHV                          1R       1R                         0DFNH\Y8QLWHG6WDWHV            

&LU0ROOQRZY&DUOWRQ)GWK&LU              KROGLQJWKDWWKHRIILFHUVZHUHDFWLQJZLWKLQWKHVFRSHRIWKHLU
sDIIHHY8QLWHG6WDWHV)GG&LU             HPSOR\PHQWZKHQWKH\DOOHJHGO\KDUDVVHG0DFNH\6HHLGDW
HQEDQF&LWL]HQV1DWjO%DQNRI:DXNHJDQY8QLWHG               
6WDWHV)GWK&LU5RWNRY$EUDPV
)GG&LUSHUFXULDP                                 2Q UHPDQG WKH GLVWULFW FRXUW HQWHUHG MXGJPHQW IRU WKH
                                                                         8QLWHG6WDWHVVWDWLQJ
%$SSOLFDWLRQWR&LUFXPVWDQFHVRIWKLV&DVH
                                                                              7KLVPDWWHULVEHIRUHWKH&RXUWXSRQWKHPDQGDWHRI
  0DFNH\DOVRDUJXHVWKDWHYHQLIWKH)HUHVGRFWULQHDSSOLHV              WKH>6L[WK&LUFXLW@%DVHGXSRQVXFKPDQGDWHWKH&RXUW
WR LQWHQWLRQDO WRUW FODLPV WKH XQGHUO\LQJ SULQFLSOHV RI WKH       ILQGVWKDWWKHLQGLYLGXDOGHIHQGDQWVZHUHDFWLQJZLWKLQ
GRFWULQHGRQRWDSSO\WRKHUFDVH+HUDUJXPHQWIRFXVHVRQ                WKHVFRSHRIWKHLUHPSOR\PHQW7KHUHIRUHWKH8QLWHG
WKHSRWHQWLDOLPSDFWWRPLOLWDU\GLVFLSOLQH                               6WDWHVLVKHUHE\VXEVWLWXWHGDVWKHGHIHQGDQWLQWKLVFDVH
                                                                           DQGWKHPDWWHULVQRWUHPDQGHGWRWKH2KLRVWDWHFRXUW
  $FFRUGLQJ WR 0DFNH\ DOORZLQJ KHU VXLW ZRXOG QRW                  8QGHUWKH)HUHVGRFWULQHmWKH*RYHUQPHQWLVQRWOLDEOH
QHJDWLYHO\ LPSDFW PLOLWDU\ GLVFLSOLQH EHFDXVH WKH QHHG IRU          ZKHUH WKH LQMXULHV DULVH RXW RI RU DUH LQ WKH FRXUVH RI
VXFKGLVFLSOLQHKDVQHYHUEHHQDGHTXDWHO\VXSSRUWHG'HVSLWH              DFWLYLW\LQFLGHQWWRVHUYLFHl)HUHVY8QLWHG6WDWHV
KHU DUJXPHQWV WKH 6XSUHPH &RXUW KDV KHOG WKDW PLOLWDU\            86
GLVFLSOLQHLVDPDWWHURIFRQFHUQDQGWKDWDOORZLQJODZVXLWV
ZRXOGLPSDLUVXFKGLVFLSOLQH6HH6KHDUHU86DW                                                ,,
sRKQVRQ86DW
                                                                           7KH )7&$ ZDLYHV WKH 8QLWHG 6WDWHVj OLDELOLW\ IRU WRUW
  0DFNH\DOVRDUJXHVWKDWKHUFODLPVGRQRWLPSOLFDWHLVVXHV             FODLPVVXEMHFWWRFHUWDLQH[FHSWLRQV6HH86&
RIMXGJPHQWGLVFUHWLRQRUFRPPDQGEHFDXVHWKHDFWLYLWLHV               7KHm)HUHVGRFWULQHlUHIHUVWRWKH6XSUHPH&RXUWjV
VKHFRPSODLQVRImVLPSO\FDQQRWEHYLHZHGDVDFFHSWDEOHLQ               FRQFOXVLRQ WKDW mWKH *RYHUQPHQW LV QRW OLDEOH XQGHU WKH
DQ\IDVKLRQl6KHPDLQWDLQVWKDWVKHLVQRWFKDOOHQJLQJDQ\             )HGHUDO7RUW&ODLPV$FWIRULQMXULHVWRVHUYLFHPHQZKHUHWKH
ZRUN DVVLJQPHQWV GLVFLSOLQH RU HYDOXDWLRQV QRU LV VKH          LQMXULHVDULVHRXWRIRUDUHLQWKHFRXUVHRIDFWLYLW\LQFLGHQWWR
FKDOOHQJLQJ KHU VXSHULRUVj DXWKRULW\ WR JLYH KHU RUGHUV          VHUYLFHl)HUHV86DW
5HYLHZ RI WKH 6XSUHPH &RXUWjV FRQFHUQV ZLWK UHVSHFW WR
PLOLWDU\GLVFLSOLQHGHPRQVWUDWHVWKDWWKLVFDVHZRXOGLPSDFW                :LWKUHVSHFWWRWKHFODLPVWKDWDUHDWLVVXHLQWKLVDSSHDO
PLOLWDU\GLVFLSOLQH,Q6KHDUHUDVHUYLFHPDQZDVNLGQDSHG              0DFNH\PDNHVWZRPDMRUDUJXPHQWV)LUVWVKHDUJXHVWKDW
DQGPXUGHUHGE\DQRWKHUVHUYLFHPDQZKRKDGEHHQFRQYLFWHG                WKH)HUHVGRFWULQHGRHVQRWDSSO\WRLQWHQWLRQDOWRUWV6HFRQG
RIPDQVODXJKWHUZKLOHDVVLJQHGWRDGLIIHUHQW$UP\EDVH6HH            VKH DUJXHV WKDW HYHQ LI WKH )HUHV GRFWULQH GRHV DSSO\ WR
86DW7KHGHFHDVHGVHUYLFHPDQjVPRWKHUVXHG                LQWHQWLRQDO WRUWV LW VKRXOG QRW EH DSSOLHG XQGHU WKH
WKH$UP\DOOHJLQJWKDWLWZDVQHJOLJHQWLQKRZLWGHDOWZLWK             FLUFXPVWDQFHVRIWKLVFDVH1HLWKHUDUJXPHQWLVSHUVXDVLYH
WKHSUHYLRXVO\FRQYLFWHGVHUYLFHPDQ7KH&RXUWIRXQGWKDW
WKHDOOHJDWLRQVLQ6KHDUHUZHQWGLUHFWO\WRWKHPDQDJHPHQWRI
WKH PLOLWDU\ FDOOLQJ LQWR TXHVWLRQ mEDVLF FKRLFHV DERXW WKH         
GLVFLSOLQHVXSHUYLVLRQDQGFRQWURORIDVHUYLFHPDQl,GDW                %  KH RQO\ FODLPV DW LVVXH LQ WKLV DSSHDO DUH WKRVH IRU LQWHQWLRQDO

  7KH &RXUW SRLQWHG RXW WKDW WKH FODLPV ZRXOG UHTXLUH       LQIOLFWLRQ RI HPRWLRQDO GLVWUHVV VH[XDO KDUDVVPHQW DQG VH[
                                                                         GLVFULPLQDWLRQ $00  86&$  K SURYLGLQJ WKDW WKH )7&$
RIILFHUV WR WHVWLI\ DV WR HDFK RWKHUjV GHFLVLRQV DQG DFWLRQV   GRHV QRW DSSO\ WR m>D@Q\ FODLP DULVLQJ RXW RI DVVDXOW EDWWHU\    RU
PHDQLQJ WKDW FRPPDQGLQJ RIILFHUV ZRXOG KDYH WR VWDQG              LQWHUIHUHQFH ZLWK FRQWUDFW ULJKWVl
     0DFNH\Y8QLWHG6WDWHV                         1R       1R                       0DFNH\Y8QLWHG6WDWHV           

$$SSOLFDWLRQWR&ODLPVRI,QWHQWLRQDO7RUWV                          MXGLFLDU\LQVHQVLWLYHPLOLWDU\DIIDLUVDWWKHH[SHQVHRIPLOLWDU\
                                                                        GLVFLSOLQHDQGHIIHFWLYHQHVV6HHLGDW
   0DFNH\ DUJXHV WKDW WKH )HUHV GRFWULQH DSSOLHV RQO\ WR
FODLPV RI QHJOLJHQFH  6KH FRUUHFWO\ SRLQWV RXW WKDW WKH         7KH6XSUHPH&RXUWKDVDOVRDSSOLHGWKH)HUHVGRFWULQHWR
VLWXDWLRQVDGGUHVVHGLQ)HUHVLQYROYHGFODLPVRIQHJOLJHQFH            PRUH WKDQ MXVW QHJOLJHQFH FODLPV  6SHFLILFDOO\ )HUHV KDV
6KHIXUWKHUPDLQWDLQVWKDWWKHGRFWULQHLVGHULYHGIURPWKH             EHHQDSSOLHGWRFODLPVRIFRQVWLWXWLRQDOYLRODWLRQVDOOHJHGLQ
ILUVWH[FHSWLRQWRWKH)7&$ZKLFKH[FOXGHVIURPVXLWm>D@Q\            %LYHQVDFWLRQV6HHHJ&KDSSHOOY:DOODFH86
FODLPEDVHGXSRQDQDFWRURPLVVLRQRIDQHPSOR\HHRIWKH               LQYROYLQJFODLPRIUDFHGLVFULPLQDWLRQ,Q
*RYHUQPHQWH[HUFLVLQJGXHFDUHLQWKHH[HFXWLRQRIDVWDWXWH          &KDSSHOOWKH&RXUWLQGLFDWHGWKDW
RUUHJXODWLRQl86&$D0DFNH\jV
LPSOLFLWDUJXPHQWVHHPVWREHWKDWLIWKH)HUHVGRFWULQHLV               7KH VSHFLDO QDWXUH RI PLOLWDU\ OLIH o WKH QHHG IRU
GHULYHGIURPDQH[FHSWLRQXVLQJWHUPVRIQHJOLJHQFHLWPXVW              XQKHVLWDWLQJDQGGHFLVLYHDFWLRQE\PLOLWDU\RIILFHUVDQG
EHWDUJHWHGVROHO\DWQHJOLJHQFH                                         HTXDOO\ GLVFLSOLQHG UHVSRQVHV E\ HQOLVWHG SHUVRQQHO o
                                                                          ZRXOG EH XQGHUPLQHG E\ D MXGLFLDOO\ FUHDWHG UHPHG\
  1RWKLQJLQ)HUHVVXJJHVWVWKDWLWLVGHULYHGIURPWKHmGXH              H[SRVLQJ RIILFHUV WR SHUVRQDO OLDELOLW\ DW WKH KDQGV RI
FDUHl H[FHSWLRQ WR WKH )7&$  ,QVWHDG WKH )HUHV GRFWULQH        WKRVHWKH\DUHFKDUJHGWRFRPPDQG+HUHDVLQ)HUHV
VWHPV IURP WKH H[FHSWLRQ IRU FODLPV mDULVLQJ RXW RI WKH          ZH PXVW EH mFRQFHUQ>HG@ ZLWK WKH GLVUXSWLRQ RI µ>W@KH
FRPEDWDQW DFWLYLWLHV RI WKH PLOLWDU\ RU QDYDO IRUFHV RU WKH     SHFXOLDU DQG VSHFLDO UHODWLRQVKLS RI WKH VROGLHU WR KLV
&RDVW*XDUGGXULQJWLPHRIZDUl86&$MVHH             VXSHULRUVjWKDWPLJKWUHVXOWLIWKHVROGLHUZHUHDOORZHGWR
)OHPLQJY8QLWHG6WDWHV3RVWDO6HUY)GWK             KDOHKLVVXSHULRUVLQWRFRXUWl
&LULQGLFDWLQJWKDWWKH)HUHVGRFWULQHLVDEURDGHQLQJ
RIWKHVHFWLRQMH[FHSWLRQ                                    ,GDW7KH&RXUWDOVRLQGLFDWHGWKDW&RQJUHVVKDGQRW
                                                                        SURYLGHGDGDPDJHVUHPHG\IRUFODLPVE\PLOLWDU\SHUVRQQHO
  )XUWKHUPRUH WKH UDWLRQDOHV EHKLQG WKH GRFWULQH DUH QRW        RIYLRODWLRQVRIFRQVWLWXWLRQDOULJKWV6HHLG3XWWLQJWRJHWKHU
OLPLWHG WR VLWXDWLRQV RI QHJOLJHQFH  ,Q 8QLWHG 6WDWHV Y      WKH mXQLTXH GLVFLSOLQDU\ VWUXFWXUHl RI WKH PLOLWDU\ DQG
6KHDUHU  86   WKH &RXUW LGHQWLILHG WKH           &RQJUHVVjODFNRIDFWLYLW\LQWKHILHOGWKH&RXUWKHOGWKDW
XQGHUO\LQJ UDWLRQDOHV DV   WKH SHFXOLDU DQG VSHFLDO         PLOLWDU\SHUVRQQHOGLGQRWKDYHDYDLODEOHWRWKHPD%LYHQV
UHODWLRQVKLSRIWKHVROGLHUWRKLVVXSHULRUVWKHHIIHFWVRI        W\SHUHPHG\DJDLQVWWKHLUVXSHULRURIILFHUV6HHLG:KLOH
WKH PDLQWHQDQFH RI VXFK VXLWV RQ GLVFLSOLQH DQG  WKH       &RQJUHVVj DFWLYLW\ LQ WKH ILHOG LV GLIIHUHQW ZLWK UHVSHFW WR
H[WUHPH UHVXOWV WKDW PLJKW REWDLQ LI VXLWV XQGHU WKH )7&$      0DFNH\jV FODLPV DV RSSRVHG WR %LYHQVW\SH FODLPV WKH
ZHUH DOORZHG IRU QHJOLJHQW RUGHUV JLYHQ RU QHJOLJHQW DFWV       UDWLRQDOHH[SUHVVHGLQ&KDSSHOOUHJDUGLQJWKHVSHFLDOQDWXUH
FRPPLWWHG LQ WKH FRXUVH RI PLOLWDU\ GXW\  6HH LG DW      RIPLOLWDU\OLIHDSSOLHVHTXDOO\WRWKHSUHVHQWFDVH
TXRWLQJ8QLWHG6WDWHVY0XQL]86
$ODWHUFDVH8QLWHG6WDWHVYsRKQVRQ86              7KHUH LV QR DXWKRULW\ LQ WKH )7&$ RU 6XSUHPH &RXUW
VHW RXW WKH XQGHUO\LQJ UDWLRQDOHV DV   WKH GLVWLQFWLYHO\   SUHFHGHQW WR DSSO\ WKH )HUHV GRFWULQH RQO\ WR FODLPV RI
IHGHUDOFKDUDFWHURIWKHUHODWLRQVKLSEHWZHHQWKHJRYHUQPHQW            QHJOLJHQFH DQG QRW WR FODLPV RI LQWHQWLRQDO WRUWV  :H MRLQ
DQG PHPEHUV RI LWV DUPHG IRUFHV  WKH H[LVWHQFH RI          ZLWK WKH RWKHU 8QLWHG 6WDWHV &RXUWV RI $SSHDOV WKDW KDYH
JHQHURXVVWDWXWRU\GLVDELOLW\DQGGHDWKEHQHILWVDQGWKH           DGGUHVVHGWKHLVVXHDQGKROGWKDWWKH)HUHVGRFWULQHDSSOLHVWR
LPSDFW RI DOORZLQJ ODZVXLWV ZKLFK ZRXOG LQYROYH WKH             LQWHQWLRQDOWRUWV6HH%RLVY0DUVK)G'&
                                                                        &LU7UHULFHY6XPPRQV)GWK
                                                                        &LU6WXEEVY8QLWHG6WDWHV)GWK
