5(&200(1'(' )25 )8//7(;7 38%/,&$7,21  6WURXVVY0LFKLJDQ'HSWRI 1R 3XUVXDQW WR 6L[WK &LUFXLW 5XOH  &RUUHFWLRQVHWDO (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS %URZQjVVH[XDOKDUDVVPHQWLVDPDWWHURISXEOLFFRQFHUQ DQGWKDWKHULQWHUHVWLQFRPPHQWLQJXSRQPDWWHUVRISXEOLF 81,7('67$7(6&28572)$33($/6 FRQFHUQ RXWZHLJK WKH LQWHUHVW RI  WKH 6WDWH 6WURXVV KDV QRQHWKHOHVV IDLOHG WR PDNH RXW D SULPD IDFLH FDVH RI )257+(6,;7+&,5&8,7 UHWDOLDWLRQLQOLJKWRIWKHODFNRIHYLGHQFHWKDWGHIHQGDQWVj BBBBBBBBBBBBBBBBB GHFLVLRQWRWUDQVIHUKHULQZDVPRWLYDWHGE\DGHVLUHWR UHWDOLDWHDJDLQVWKHUIRURSSRVLQJ:DUGHOO%URZQjVDOOHJHG KDUDVVPHQW LQ   7KXV WKH GLVWULFW FRXUW SURSHUO\ GLVPLVVHG6WURXVVj)LUVW$PHQGPHQWUHWDOLDWLRQFODLP 686$1 6752866 ; 3ODLQWLII$SSHOODQW  ,9&21&/86,21   1R )RUWKHIRUHJRLQJUHDVRQVZH$)),50WKHGLVWULFWFRXUWjV Y  GHFLVLRQ !  0,&+,*$1 '(3$570(17 2)  &255(&7,216DVWDWHDJHQF\  DQGERG\SROLWLF0$5,(  )/(7&+(5*(5$/' '(9266  LQWKHLULQGLYLGXDOFDSDFLWLHV   'HIHQGDQWV$SSHOOHHV 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW 1Rn*HUDOG(5RVHQ'LVWULFWsXGJH 6XEPLWWHGsDQXDU\ 'HFLGHGDQG)LOHG0D\ %HIRUHs21(6DQG&2/(&LUFXLWsXGJHV18*(17 'LVWULFWsXGJH  $OWKRXJK ZH GR QRW UHDFK WKLV LVVXH 6WURXVVj DUJXPHQW WKDW KHU RSSRVLWLRQ WR :DUGHOO %URZQjV KDUDVVPHQW LV D PDWWHU RI SXEOLF FRQFHUQ KDV VRPH PHULW 7KH 6L[WK &LUFXLW LQ 3HUU\ Y 0F*LQQLV KHOG WKDW UDFLDO GLVFULPLQDWLRQ LV LQKHUHQWO\ D PDWWHU RI SXEOLF FRQFHUQ 6HH  )G   WK &LU  %\ DQDORJ\ VH[XDO KDUDVVPHQW ZKLFK LV D VSHFLILF 7KH +RQRUDEOH 'RQDOG & 1XJHQW 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU IRUP RI JHQGHU GLVFULPLQDWLRQ OLNHZLVH LV PDWWHU RI SXEOLF FRQFHUQ WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ   6WURXVVY0LFKLJDQ'HSWRI 1R 1R 6WURXVVY0LFKLJDQ'HSWRI  &RUUHFWLRQVHWDO &RUUHFWLRQVHWDO BBBBBBBBBBBBBBBBB WLPHRQDSSHDO,QWKHFDVHDWEDUSODLQWLIIUDLVHGWKH)LUVW $PHQGPHQW UHWDOLDWLRQ FODLP LQ KHU PRWLRQ RSSRVLQJ &2816(/ VXPPDU\ MXGJPHQW  6KH GLG UDLVH WKH FODLP EHORZ DFFRUGLQJO\ WKH )LUVW $PHQGPHQW FODLP LV SUHVHUYHG IRU 21 %5,()  &KULVWLQH $ *UHHQ *5((1 *5((1 DSSHOODWHUHYLHZ6HH(YDQVY%H[OH\)G $'$06 3$/0(5$QQ$UERU0LFKLJDQIRU$SSHOODQW QWK&LUm ,QIHGHUDOSUDFWLFHDQ\TXHVWLRQZKLFK .DWKHULQH & *DOYLQ 2)),&( 2) 7+( $77251( RIDUHWDOLDWRU\PRWLYH@FDQEHPDGHZKHUH DWWKHWLPHRIKHUDVVLJQPHQWWRWKH&RWWRQ)DFLOLW\WKDWWKH WKHUHOHYDQWFKDUJHVSUHFHGHGWKHHPSOR\HUjVDGYHUVHDFWLRQ DVVLJQPHQW ZDV RQO\ WHPSRUDU\ DQG WKDW WKH\ ZHUH LQ WKH E\ DV PXFK DV WKUHH \HDUVl 2OLYHU Y 'LJLWDO (TXLSPHQW SURFHVV RI LQWHUYLHZLQJ IRU SHUPDQHQW GD\ VKLIW SRVLWLRQV &RUSRUDWLRQ)GVW&LUKROGLQJ 6KH HQFRXUDJHG 6WURXVV WR LQWHUYLHZ IRU WKHVH SRVLWLRQV WKDW GLVFKDUJH RYHU WZR DQG RQH KDOI \HDUV DIWHU HPSOR\HH EHFDXVHRQFHWKH\ZHUHILOOHG6WURXVVZRXOGKDYHWRUHWXUQWR ILOHG((2&FRPSODLQWZDVLQVXIILFLHQWVKRZLQJRIUHWDOLDWLRQ KHU 51  0DQDJHU SRVLWLRQ LQ WKH &HQWUDO &RPSOH[ WRDYRLGVXPPDU\MXGJPHQWIRUHPSOR\HU 6WURXVV RQ WKH RWKHU KDQG DOOHJHV WKDW VKH ZDV WROG E\ sDFNVRQWKDWKHUWUDQVIHUWRWKHGD\VKLIWLQ$PEXODWRU\&DUH ,Q VXP 6WURXVV KDV IDLOHG WR UDLVH D JHQXLQH LVVXH RI ZDVWREHSHUPDQHQW6KHGLGQRWKDYHWRLQWHUYLHZIRUWKH PDWHULDO IDFW DV WR ZKHWKHU WKHUH LV D FDXVDO FRQQHFWLRQ SRVLWLRQV EXW UDWKHU RQO\ KDG WR JLYH sDFNVRQ KHU VRFLDO EHWZHHQKHUSURWHFWHGDFWLYLW\DQGKHUODWHUDOWUDQVIHUWRWKH VHFXULW\QXPEHUVRKHUQDPHFRXOGEHSODFHGRQWKHmUHJLVWHUl &HQWUDO &RPSOH[ IDFLOLW\  $FFRUGLQJO\ VKH KDV IDLOHG WR IRU WKH RSHQ SRVLWLRQV  6WURXVV FODLPV WKDW VKH GLG JLYH HVWDEOLVKDSULPDIDFLHFDVHRIUHWDOLDWLRQ sDFNVRQKHUVRFLDOVHFXULW\QXPEHU:LWKUHVSHFWWR6WURXVVj FRQFHUQ DERXW SODFHPHQW LQ &HQWUDO &RPSOH[ EHFDXVH RI '6HFWLRQ'XH3URFHVV&ODLP WKUHDWVDOOHJHGO\PDGHE\SULVRQHUVZKRZHUHKRXVHGWKHUH sDFNVRQWHVWLILHGWKDWVKHWROG6WURXVVWRJLYHKHUWKHQDPHV 6WURXVVDVVHUWVD6HFWLRQGXHSURFHVVFODLPDJDLQVWWKH DQGSULVRQHUQXPEHUVRIWKHVHDOOHJHGSULVRQHUHQHPLHVEXW LQGLYLGXDOGHIHQGDQWV6WURXVVFODLPVWKDWRQsXQH 6WURXVV QHYHU GLG  6WURXVV FODLPV WKDW VKH JDYH WKLV GHIHQGDQWVVXVSHQGHGKHUZLWKRXWSD\SHQGLQJLQYHVWLJDWLRQ LQIRUPDWLRQWRs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†  SURYLGHV WKDW m>H@YHU\ SHUVRQ ZKR XQGHU FRORU RI *UHJRU\1D\ORU'U*LYHQj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l  6WURXVVY0LFKLJDQ'HSWRI 1R 1R 6WURXVVY0LFKLJDQ'HSWRI  &RUUHFWLRQVHWDO &RUUHFWLRQVHWDO RSSRUWXQLW\WRRULHQWWRDPEXODWRU\FDUHDQGWRLQWHUYLHZIRU 2Q 2FWREHU   6WURXVV ZDV LQIRUPHG E\ sDFNLH DQWLFLSDWHG  DP WR  SP 51 SRVLWLRQV KHUH LQ sDFNVRQWKDWVKHZDVEHLQJWUDQVIHUUHGEDFNWRWKH&HQWUDO sDFNVRQ7KHVHSRVLWLRQVKDYHEHHQILOOHGls$ &RPSOH[ IDFLOLW\ WR ZRUN WKH VHFRQG VKLIW DV RULJLQDOO\ VFKHGXOHG  0V sDFNVRQjV 2FWREHU  0HPRUDQGXP WR 7KXVWKHOHWWHUE\sDFNLHsDFNVRQDQG6WURXVVjRZQVZRUQ 6WURXVVVWDWHG WHVWLPRQ\HVWDEOLVKWKDWKHUDVVLJQPHQWWRWKH&RWWRQ)DFLOLW\ ZDVRQO\WHPSRUDU\,QVXP6WURXVVKDVIDLOHGWRSURGXFH (IIHFWLYH1RYHPEHULWZLOOEHQHFHVVDU\IRU mHYLGHQFH RQ ZKLFK WKH MXU\ FRXOG UHDVRQDEO\ ILQGl WKDW \RX WR UHSRUW WR 60,s0) &HQWUDO &RPSOH[ RQ WKH sDFNLHsDFNVRQUHQHJHGRQDSURPLVHWRJLYHKHUDSHUPDQHQW DIWHUQRRQVKLIWSPWRSP SRVLWLRQDWWKH&RWWRQ)DFLOLW\$QGHUVRQ86DW   6WURXVV VLPSO\ FDQQRW UHEXW WKH RQO\ UHDVRQDEOH RIDFDXVDOFRQQHFWLRQ@LQWKHIDFHRIFRPSHOOLQJ HYLGHQFHWKDWWKHGHIHQGDQWFRPSDQ\HQFRXUDJHGFRPSODLQWV s$DW DERXWWKHUHOHYDQWJULHYDQFHl)HQWRQ)GDW,Q WKHFDVHDWEDUWKHUHLVFRPSHOOLQJHYLGHQFHWKDWGHIHQGDQW 6WURXVV FODLPV WKDW RQ 2FWREHU   VKH DJDLQ JDYH HQFRXUDJHG FRPSODLQWV DERXW VH[XDO KDUDVVPHQW  6WURXVV sDFNVRQ WKH QDPHV RI WKH SULVRQHUV KRXVHG LQ &HQWUDO GRHVQRWGLVSXWHWKDWWKHVDPHGD\WKDWVKHFRPSODLQHGRI'U &RPSOH[ZKRKDGWKUHDWHQHGKHUDQGWKDWsDFNVRQVDLGVKH *LYHQjVVH[XDOFRPPHQWV1DQF\/DQJHJDYHKHUDSDFNDJH ZRXOGmVHHZKDWVKHFRXOGGRDERXWLWl6WURXVVWHVWLILHGLQ RXWOLQLQJSURFHGXUHVIRUILOLQJVH[XDOKDUDVVPHQWFRPSODLQWV KHU GHSRVLWLRQ m, KDG QR FKRLFH EXW WR UHVLJQ IURP WKH UHSRUWHGWKHLQFLGHQWWRWKHVH[XDOKDUDVVPHQWFRXQVHORUDWWKH GHSDUWPHQW  0\ MRE LVQjW ZRUWK P\ OLIHl  s$ DW  IDFLOLW\DQGLQIRUPHG'U*LYHQjVVXSHUYLVRU$IHZGD\V 6WURXVVKDGWZRZHHNVRIVLFNOHDYHWLPHVRVKHWRRNWKHQH[W ODWHU'U*LYHQVZDVWUDQVIHUUHGRXWRI6WURXVVjGHSDUWPHQW WZRZHHNVRIIDQGRQ1RYHPEHUTXLWKHUMRE ,Q OLJKW RI WKLV FRPSHOOLQJ DQG XQFRQWHVWHG HYLGHQFH RI GHIHQGDQWjV VZLIW UHVSRQVH WR 6WURXVVj VH[XDO KDUDVVPHQW 2Q1RYHPEHU6WURXVVILOHGDQ((2&FRPSODLQW FRPSODLQWWHPSRUDOSUR[LPLW\DORQHLVQRWVXIILFLHQWWRUDLVH FKDUJLQJ WKH 0LFKLJDQ 'HSDUWPHQW RI &RUUHFWLRQV ZLWK DQLQIHUHQFHRIDFDXVDOFRQQHFWLRQEHWZHHQKHUFRPSODLQW UHWDOLDWLRQ8QOLNHKHUSUHYLRXVFKDUJHLQ$XJXVWRI DQGWKHWUDQVIHU 6WURXVVGLGQRWLQGLFDWHWKDWWKLVZDVDmFRQWLQXLQJDFWLRQl EXWUDWKHULQGLFDWHGRQO\WKDWWKHGDWHRQZKLFKWKHDOOHJHG ZURQJIXOUHWDOLDWLRQWRRNSODFHZDVmlLHWKHGDWH RQZKLFK6WURXVVZDVQRWLILHGWKDWVKHZDVEHLQJWUDQVIHUUHG  6WURXVVY0LFKLJDQ'HSWRI 1R 1R 6WURXVVY0LFKLJDQ'HSWRI  &RUUHFWLRQVHWDO &RUUHFWLRQVHWDO IURP WKH &RWWRQ )DFLOLW\ WR WKH VHFRQG VKLIW LQ WKH &HQWUDO &DXVDO&RQQHFWLRQ &RPSOH[,QKHUFKDUJH6WURXVVRQO\PHQWLRQHGWKHDOOHJHG KDUDVVPHQWE\'U*LYHQVDVDEDVLVIRUWKHFRPSODLQW2Q 6WURXVV FRQWHQGV WKDW VKH ZDV WUDQVIHUUHG WR WKH &HQWUDO 0DUFK   WKH ((2& LVVXHG LWV 1RWLILFDWLRQ RI WKH &RPSOH[ IDFLOLW\ EHFDXVH RI KHU RSSRVLWLRQ WR 'U *LYHQjV 5LJKW WR 6XH QRWLI\LQJ SODLQWLII WKDW VKH KDG  GD\V IURP VH[XDOKDUDVVPHQW+RZHYHUWKHUHLVFOHDUDQGXQGLVSXWHG UHFHLSW WKHUHRI WR LQVWLWXWH D MXGLFLDO DFWLRQ  2Q sXQH  HYLGHQFHWKDW6WURXVVZDVLQIRUPHGRIWKHGHFLVLRQWRWUDQVIHU 6WURXVVLQLWLDWHGWKHLQVWDQWDFWLRQDJDLQVW0'2&DQG KHUWRWKH&HQWUDO&RPSOH[IDFLOLW\RQsXO\VHYHUDO LQGLYLGXDO'HIHQGDQWV0DULH)OHWFKHUDQG*HUDOG'H9RVV PRQWKV EHIRUH VKH FRPSODLQHG RI 'U *LYHQjV VH[XDO FRPPHQWV7KXVWKHUHLVQRJHQXLQHLVVXHRIPDWHULDOIDFW ,Q&RXQW,RIKHUWZRFRXQW&RPSODLQW6WURXVVDOOHJHVWKDW DVWRZKHWKHUKHURSSRVLWLRQWR'U*LYHQjVVH[XDOFRPPHQWV GHIHQGDQWVEHJDQDFRXUVHRIUHWDOLDWLQJDJDLQVWKHULQ OHGWRWKHODWHUDOWUDQVIHUVKHGHHPVDFRQVWUXFWLYHGLVFKDUJH EHFDXVHVKHRSSRVHGDQGFRPSODLQHGRIVH[XDOKDUDVVPHQWE\ :DUGHOO %URZQ DQG WKDW WKH FRXUVH RI FRQGXFW FRQWLQXHG 6WURXVVDFNQRZOHGJHVWKDWVKHZDVLQIRUPHGRIWKHGHFLVLRQ WKURXJKRXWKHU\HDUVRIHPSOR\PHQWZLWKWKH0'2&XQWLOWKH WRWUDQVIHUKHUWRWKH&HQWUDO&RPSOH[IDFLOLW\PRQWKVEHIRUH GDWHVKHZDVIRUFHGWRUHVLJQ6WURXVVIXUWKHUVWDWHVWKDWWKH KHURSSRVLWLRQWR'U*LYHQjVVH[XDOKDUDVVPHQW+RZHYHU SURSRVHG WUDQVIHU RI KHU LQ WKH )DOO RI  WR WKH &HQWUDO VKH DUJXHV WKDW sDFNLH sDFNVRQ RIIHUHG KHU D SHUPDQHQW &RPSOH[VHFRQGVKLIWZDVDOVRLQUHWDOLDWLRQIRUKHUKDYLQJ SRVLWLRQDWWKH&RWWRQ)DFLOLW\LQUHVSRQVHWRKHUREMHFWLRQVWR FRPSODLQHGRIVH[XDOKDUDVVPHQWE\:DUGHOO%URZQLQ EHLQJ WUDQVIHUUHG WR WKH &HQWUDO &RPSOH[ IDFLOLW\  6WURXVV DQGLQUHWDOLDWLRQIRUKDYLQJFRPSODLQHGRIRIIHQVLYHVH[XDO FRQWHQGV WKDW sDFNVRQ UHQHJHG RQ WKLV SURPLVH DIWHU VKH FRPPHQWVE\'U*LYHQVDWWKH&RWWRQ)DFLOLW\ FRPSODLQHGRI'U*LYHQjVVH[XDOKDUDVVPHQW6WURXVVjFODLP WKDWWKH&RWWRQ)DFLOLW\DVVLJQPHQWZDVSHUPDQHQWLVZLWKRXW ,Q &RXQW ,, RI KHU FRPSODLQW 6WURXVV DOOHJHV WKDW LQ VXSSRUW LQ WKH UHFRUG LQGHHG KHU RZQ VZRUQ WHVWLPRQ\ UHWDOLDWLRQIRUFRPSODLQLQJRIVH[XDOKDUDVVPHQWE\:DUGHOO XQGHUPLQHVKHUFODLPsDFNLHsDFNVRQWHVWLILHGWKDWVKHWROG %URZQDQGLQYLRODWLRQRIKHUULJKWWRGXHSURFHVVDQGHTXDO 6WURXVVWKDWVKHZDVRQO\WHPSRUDULO\DVVLJQHGWRWKH&RWWRQ SURWHFWLRQVKHZDVXQIDLUO\GLVFLSOLQHGLQsXQHIRUQRW )DFLOLW\ DQG WKDW VKH HQFRXUDJHG 6WURXVV WR LQWHUYLHZ IRU IROORZLQJ WKURXJK ZLWK D GRFWRUjV RUGHUV UHJDUGLQJ D SHUPDQHQWSRVLWLRQVDWWKDWIDFLOLW\EHIRUHWKHSRVLWLRQVZHUH SULVRQHUjVLPSHQGLQJVXUJHU\DQGRIHQWHULQJDSDWLHQWjVURRP ILOOHG6WURXVVFRUURERUDWHGsDFNVRQjVWHVWLPRQ\E\VWDWLQJ DORQH6SHFLILFDOO\6WURXVVDOOHJHVWKDW'HIHQGDQWV)OHWFKHU WKDW sDFNVRQ DFWLYHO\ UHFUXLWHG KHU WR VWD\ DW WKH &RWWRQ DQG'H9RVVLQVWLWXWHGGLVFLSOLQDU\SURFHHGLQJVDJDLQVWKHULQ )DFLOLW\ E\ WHOOLQJ KHU RI SRVLWLRQV IRU ZKLFK VKH FRXOG sXQHDQGDWWHPSWHGWRWUDQVIHUKHUWRWKHVHFRQGVKLIWLQ LQWHUYLHZ7KXV6WURXVVjRZQVZRUQWHVWLPRQ\LQGLFDWHVWKDW &HQWUDO &RPSOH[ EHFDXVH VKH FRPSODLQHG RI VH[XDO WKH &RWWRQ )DFLOLW\ DVVLJQPHQW ZDV RQO\ WHPSRUDU\ KDUDVVPHQW  7KLV VKH FRQWHQGV DPRXQWV WR GLIIHUHQW &RQVLVWHQWZLWK6WURXVVjWHVWLPRQ\LVWKH2FWREHU VWDQGDUGV RI WUHDWPHQW IURP WKDW DIIRUGHG WR mRWKHU OHWWHU WKDW sDFNLH sDFNVRQ ZURWH WR SODLQWLII ZKLFK VWDWHG GHSDUWPHQWDO HPSOR\HHV ZKR GLG QRW FRPSODLQ RI VH[XDO m>D@V PXWXDOO\ GLVFXVVHG DQG DJUHHG XSRQ \RX ZHUH KDUDVVPHQWls$DW WHPSRUDULO\DVVLJQHGWRs&)&RWWRQ)DFLOLW\WRDOORZ\RXWKH   *HUDOG 'H9RVV ZURWH D OHWWHU WR 6WURXVV RQ sXO\   ZKLFK VWDWHG WKDW m>G@XH WR RSHUDWLRQDO QHHGV \RX DUH SHUPDQHQWO\ UHDVVLJQHG WR $PEXODWRU\ +HDOWK &DUH DW 60, &HQWUDO &RPSOH[    l s$   6WURXVVY0LFKLJDQ'HSWRI 1R 1R 6WURXVVY0LFKLJDQ'HSWRI  &RUUHFWLRQVHWDO &RUUHFWLRQVHWDO $GYHUVH(PSOR\PHQW$FWLRQ ,,',675,&7&2857j623,1,21 ,QGLVSXWHLVZKHWKHU6WURXVVjODWHUDOWUDQVIHUFRQVWLWXWHVDQ 7KH GLVWULFW FRXUW KHOG WKDW 6WURXVVj 7LWOH 9,, UHWDOLDWLRQ DGYHUVHHPSOR\PHQWDFWLRQm$QHPSOR\HHjVUHMHFWLRQRID FODLPLVOLPLWHGWRWKHVFRSHRIKHU1RYHPEHU((2& ODWHUDO WUDQVIHU LV DOZD\V DFWLRQDEOH DV DQ µDGYHUVH FKDUJH7KHFRXUWIRXQGWKDW6WURXVVjDOOHJDWLRQVRIEHLQJ HPSOR\PHQWDFWLRQjLIWKHFRQGLWLRQVRIWKHWUDQVIHUZRXOG UHWDOLDWHGDJDLQVWE\KHUHPSOR\HUIRUKDYLQJRSSRVHGVH[XDO KDYH EHHQ REMHFWLYHO\ LQWROHUDEOH WR D UHDVRQDEOH SHUVRQ KDUDVVPHQWE\:DUGHOO%URZQLQFDQQRWUHDVRQDEO\EH WKHUHE\DPRXQWLQJWRDµFRQVWUXFWLYHGLVFKDUJHjl'DUQHOOY H[SHFWHGWRJURZRXWRIWKH((2&FKDUJHRIUHWDOLDWLRQIRU &DPSHOO&RXQW\)LVFDO&RXUW1R86$SS FRPSODLQLQJ DERXW mXQZHOFRPH VH[XDO FRPPHQWVl E\ D /(;,6  DW  WK &LU )HE  XQSXEOLVKHG GRFWRUZLWKZKRPVKHZDVZRUNLQJLQ,QDGGLWLRQWKH 6WURXVV DOOHJHV WKDW KHU WUDQVIHU WR WKH &HQWUDO &RPSOH[ GLVWULFWFRXUWKHOGWKDWVLQFHWKHSUHUHWDOLDWLRQFODLPV IDFLOLW\ ZRXOG KDYH HQGDQJHUHG KHU OLIH GXH WR WKUHDWV WKDW DUHQRWZLWKLQWKHVFRSHRIWKH((2&FKDUJHWKH\DUH YDULRXVLQPDWHVKRXVHGLQWKDWIDFLOLW\PDGHDJDLQVWKHU7KH WLPHEDUUHGEHFDXVH6WURXVVIDLOHGWRILOHDFLYLOVXLWRQWKRVH GHIHQGDQWV FRQWHQG WKDW 6WURXVVj DOOHJDWLRQV RI WKUHDWV DUH FODLPVZLWKLQGD\VRI((2&jVIDLOXUHWREULQJVXLWRU XQSHUVXDVLYHEHFDXVHVKHUHIXVHGWRJLYHWKHPWKHQDPHVRI ZLWKLQGD\VRI((2&jVULJKWWRVXHQRWLILFDWLRQ WKHDOOHJHGmSULVRQHUHQHPLHVl+RZHYHU6WURXVVWHVWLILHG WKDW VKH YHUEDOO\ WROG KHU VXSHUYLVRUV WKH QDPHV RI WKHVH 7KHGLVWULFWFRXUWDOVRIRXQGWKDW6WURXVVIDLOHGWRHVWDEOLVK SULVRQHUV  7KLV FRXUW PXVW FRQVWUXH WKH HYLGHQFH DQG DOO D SULPD IDFLH FDVH RI UHWDOLDWLRQ ZLWK UHVSHFW WR WKH RQO\ LQIHUHQFHVWREHGUDZQIURPLWLQWKHOLJKWPRVWIDYRUDEOHWR DGPLQLVWUDWLYHO\ H[KDXVWHG FODLP LH KHU FODLP RI EHLQJ WKHQRQPRYLQJSDUW\6HH0DWVXVKLWD(OHF,QGXV&R UHWDOLDWHGDJDLQVWIRUFRPSODLQLQJRIVH[XDOKDUDVVPHQWE\'U 86DW,QOLJKWRIWKLVGLUHFWLYHWKHUHLVDWOHDVW *LYHQV RQ 2FWREHU    :LWK UHVSHFW WR ZKHWKHU WKH DQLVVXHRIPDWHULDOIDFWDVWRZKHWKHUWKHFRQGLWLRQVRIWKH ODWHUDOWUDQVIHUZDVDQDGYHUVHHPSOR\PHQWDFWLRQWKHGLVWULFW WUDQVIHU ZKLFK PD\ KDYH SXW SODLQWLII LQWR FRQWDFW ZLWK FRXUWKHOGWKDWWKHWUDQVIHUHQWDLOHGDFKDQJHLQ6WURXVVjZRUN SULVRQHUVZKRKDGLVVXHGWKUHDWVDJDLQVWKHUZRXOGKDYHEHHQ KRXUV ZKLFK LPSDFWHG XSRQ KHU DELOLW\ WR FRQWLQXH KHU mREMHFWLYHO\ LQWROHUDEOH WR D UHDVRQDEOH SHUVRQl  'DUQHOO HGXFDWLRQ7KDWLPSDFWZDVVXIILFLHQWWRUHQGHUWKHWUDQVIHU  86 $SS /(;,6  DW   7KXV 6WURXVV KDV DQDGYHUVHHPSOR\PHQWDFWLRQ+RZHYHUWKHFRXUWIRXQGWKDW HVWDEOLVKHGWKHWKLUGHOHPHQWRIKHUUHWDOLDWLRQFODLP 6WURXVVIDLOHGWRSURGXFHVXIILFLHQWHYLGHQFHIURPZKLFKDQ LQIHUHQFHFRXOGEHGUDZQWKDWWKHUHZDVDFDXVDOFRQQHFWLRQ EHWZHHQWKHWUDQVIHUDQG6WUDXVVjRSSRVLWLRQWR'U*LYHQjV VH[XDOKDUDVVPHQW  7KH GLVWULFW FRXUW KHOG WKDW VLQFH WKH ODWHUDO WUDQVIHU ZRXOG PDNH LW 7KH GLVWULFW FRXUW IRXQG WKDW 6WURXVVj 6HFWLRQ  GXH LPSRVVLEOH IRU WKH SODLQWLII WR DWWHQG WKH VFKRRO RI KHU FKRLFH WKH WUDQVIHU SURFHVVFODLPVKRXOGEHGLVPLVVHGEHFDXVHLWZDVQRWFOHDUO\ FRQVWLWXWHV DQ DGYHUVH HPSOR\PHQW DFWLRQ 7KH GLVWULFW FRXUWjV SUHPLVH LV HVWDEOLVKHG WKDW EHLQJ VXVSHQGHG ZLWKRXW SD\ WULJJHUV GXH KLJKO\ TXHVWLRQDEOH 7KH 6L[WK &LUFXLW KHOG LQ 'DUQHOO Y &DPSEHOO SURFHVV SURWHFWLRQV  7KH GLVWULFW FRXUW DOVR IRXQG WKDW &RXQW\ )LVFDO &RXUW WKDW SXUHO\ SHUVRQDO UHDVRQV IRU WXUQLQJ GRZQ D 6WURXVVj6HFWLRQHTXDOSURWHFWLRQFODLPIDLOVEHFDXVH WUDQVIHU DUH QRW VXIILFLHQW WR UHQGHU D WUDQVIHU DQ DGYHUVH HPSOR\PHQW DFWLRQ  86 $SS /(;,6  DW  FI 'LOHQQR Y *RRGZLOO WKHUH LV QR FOHDUO\ HVWDEOLVKHG ULJKW WR EH IURP UHWDOLDWLRQ ,QGXV  )G   G &LU  REVHUYLQJ WKDW GHVLUH WR OLYH LQ XQGHU WKH HTXDO SURWHFWLRQ FODXVH WKXV WKH GHIHQGDQWV DUH D FHUWDLQ FLW\ LV QRW D mMREUHODWHG DWWULEXWHl WR EH FRQVLGHUHG ZKHQ HQWLWOHGWRTXDOLILHGLPPXQLW\RQWKDWFODLP7RWKHH[WHQW GHWHUPLQLQJ ZKHWKHU ODWHUDO WUDQVIHU ZDV DGYHUVH HPSOR\PHQW DFWLRQ  6WURXVVY0LFKLJDQ'HSWRI 1R 1R 6WURXVVY0LFKLJDQ'HSWRI  &RUUHFWLRQVHWDO &RUUHFWLRQVHWDO WKDW WKH SODLQWLII LV PDNLQJ D )LUVW $PHQGPHQW UHWDOLDWLRQ WK&LUm5HWDOLDWRU\FRQGXFWRFFXUULQJSULRUWRWKH FODLPWKHGLVWULFWFRXUWKHOGWKDWSODLQWLIIjVIDLOXUHWRUDLVH ILOLQJRIWKH((2&FRPSODLQWLVGLVWLQJXLVKDEOHIURPFRQGXFW WKDW FODLP LQ KHU FRPSODLQW SUHFOXGHV KHU IURP UDLVLQJ LW RFFXUULQJ DIWHUZDUGV DV QR XQQHFHVVDU\ GRXEOH ILOLQJ LV EHIRUH WKH GLVWULFW FRXUW LQ D PRWLRQ RSSRVLQJ VXPPDU\ UHTXLUHGE\GHPDQGLQJWKDWSODLQWLIIVDOOHJHUHWDOLDWLRQLQWKH MXGJPHQW RULJLQDO FRPSODLQWl  +HUH 6WURXVV IDLOHG WR LQFOXGH WKH FODLPVRIUHWDOLDWLRQLQKHU((2&FKDUJH6LQFH ,,,/(*$/$1$/<6,6 WKRVHSUHFODLPVRIUHWDOLDWLRQFRXOGKDYHEHHQLQFOXGHG LQKHU((2&FKDUJH6WURXVVjIDLOXUHWRGRVRGHSULYHV $6WDQGDUGRI5HYLHZ WKLV FRXUW RI VXEMHFW PDWWHU MXULVGLFWLRQ RYHU WKRVH FODLPV $FFRUGLQJO\WKHGLVWULFWFRXUWSURSHUO\GLVPLVVHGWKHSUH 7KLV &RXUW UHYLHZV D GLVWULFW FRXUW V RUGHU JUDQWLQJ UHWDOLDWLRQFODLPV VXPPDU\MXGJPHQWGHQRYR6HH5LFKDUGVRQY7RZQVKLSRI %UDG\  )G   WK &LU   6XPPDU\ )XUWKHUPRUHWKHGLVWULFWFRXUWFRUUHFWO\IRXQGWKDWWKHSUH MXGJPHQWLVDSSURSULDWHLIDSDUW\ZKRKDVWKHEXUGHQRISURRI  UHWDOLDWLRQ FODLPV DUH WLPHEDUUHG  6WURXVV ILOHG WZR DW WULDO IDLOV WR PDNH D VKRZLQJ VXIILFLHQW WR HVWDEOLVK WKH ((2& FKDUJHV LQ 0DUFK DQG $XJXVW RI    86& H[LVWHQFHRIDQHOHPHQWWKDWLVHVVHQWLDOWRWKDWSDUW\ VFDVH †HI SURYLGHV WKDW LI WKH FKDUJH ILOHG ZLWK WKH 6HH&HORWH[&RUSY&DWUHWW862Q &RPPLVVLRQ LV GLVPLVVHG RU LI ZLWKLQ  GD\V IURP WKH DSSHDOZHPXVWFRQVWUXHWKHHYLGHQFHDQGDOOLQIHUHQFHVWREH ILOLQJRIVXFKDFKDUJHWKH&RPPLVVLRQKDVQRWILOHGDFLYLO GUDZQIURPLWLQWKHOLJKWPRVWIDYRUDEOHWRWKHQRQPRYLQJ DFWLRQWKH&RPPLVVLRQVKDOOVRQRWLI\WKHSHUVRQDJJULHYHG SDUW\6HH0DWVXVKLWD(OHF,QGXV&RY=HQLWK5DGLR&RUS DQG ZLWKLQ  GD\V RI VXFK QRWLFH D FLYLO DFWLRQ PD\ EH 867KHPHUHH[LVWHQFHRIDVFLQWLOOD EURXJKW  6WURXVV GLG QRW ILOH D FLYLO VXLW UDLVLQJ WKH  RI HYLGHQFH LQ VXSSRUW RI WKH SODLQWLII V SRVLWLRQ ZLOO EH UHWDOLDWLRQFODLPVXQWLOsXQHRIZHOORXWVLGHWKHWLPH LQVXIILFLHQWWKHUHPXVWEHHYLGHQFHRQZKLFKWKHMXU\FRXOG IUDPHSURYLGHGE\VWDWXWH$FFRUGLQJO\WKHUHWDOLDWLRQ UHDVRQDEO\ILQGIRUWKHSODLQWLII$QGHUVRQY/LEHUW\/REE\ FODLPVDUHWLPHEDUUHG ,QF86 &7LWOH9,,5HWDOLDWLRQ&ODLP %7LWOH9,,5HWDOLDWLRQ&ODLPV ,Q RUGHU WR PDNH RXW D SULPD IDFLH FDVH RI UHWDOLDWLRQ ,W LV ZHOO VHWWOHG WKDW IHGHUDO FRXUWV GR QRW KDYH VXEMHFW 6WURXVVPXVWGHPRQVWUDWHWKDWVKHHQJDJHGLQDFWLYLW\ PDWWHUMXULVGLFWLRQWRKHDU7LWOH9,,FODLPVXQOHVVWKHFODLPDQW SURWHFWHG E\ 7LWOH 9,,  WKDW WKH GHIHQGDQW NQHZ RI WKLV H[SOLFLWO\ILOHVWKHFODLPLQDQ((2&FKDUJHRUWKHFODLPFDQ H[HUFLVH RI KHU SURWHFWHG ULJKWV  WKDW WKH GHIHQGDQW EHUHDVRQDEO\H[SHFWHGWRJURZRXWRIWKH((2&FKDUJH6HH FRQVHTXHQWO\WRRNDQHPSOR\PHQWDFWLRQDGYHUVHWRSODLQWLII $EHLWDY7UDQVDPHULFD0DLOLQJV,QF)GWK DQGWKDWWKHUHLVDFDXVDOFRQQHFWLRQEHWZHHQWKHSURWHFWHG &LU*HQHUDOO\UHWDOLDWLRQFODLPVEDVHGRQFRQGXFW DFWLYLW\DQGWKHDGYHUVHHPSOR\PHQWDFWLRQ6HH)HQWRQY WKDW RFFXUV DIWHU WKH ILOLQJ RI WKH ((2& FKDUJH FDQ EH +L6$1,QF)GWK&LU+DIIRUGY UHDVRQDEO\H[SHFWHGWRJURZRXWRIWKHFKDUJH6HH'XJJLQV 6HLGQHU)GWK&LU%RWKSDUWLHVDJUHH Y6WHDN 16KDNH,QF)GWK&LU WKDW6WURXVVKDVPHWWKHILUVWWZRSURQJV +RZHYHUUHWDOLDWLRQFODLPVEDVHGRQFRQGXFWWKDWRFFXUUHG EHIRUHWKHILOLQJRIWKH((2&FKDUJHPXVWEHLQFOXGHGLQWKDW FKDUJH6HH$QJY3URFWHU *DPEOH&R)G